On October 30, United States President Trump announced that the U.S. and China have finalized a preliminary trade deal after months of negotiations. Under the deal, the U.S. will cut general tariffs on China from 57% to 47%, while China will decrease tariffs on most U.S. goods by 24% and remove duties of up to 15% on certain agricultural products. In a key concession, China promised to suspend recently announced rare earth mineral export controls on holmium, erbium, thulium, europium, and ytterbium. China will also grant licenses to U.S. companies for the export of other restricted rare earth minerals as well as gallium, germanium, antimony, and graphite.
The agreement features several other commitments that address trade and regulatory concerns. China committed to immediately purchasing large amounts of American soybeans and other agricultural products, as well as American oil and gas products. Both countries will suspend recent measures to charge additional port fees on vessels built or operated by companies from the other country. Additionally, the U.S. will rescind a rule that would have included subsidiary companies owned over 50% by sanctioned companies in applicable sanction measures. The measure was expected to have a severe impact on Chinese companies if enacted. All these provisions will remain active for one year while the U.S. and China continue trade talks.
However, questions remain over whether the U.S. will allow the export of advanced artificial intelligence chips to China. In a recent statement, President Trump indicated that the U.S. may not allow the export of Nvidia Corporation’s Blackwell artificial intelligence chips to any country, including China. A subsequent statement indicated that China specifically would not be given access to the chip technology.
U.S. negotiations with trade partners in East and Southeast Asia make progress
The U.S. has also continued negotiations with other countries in Asia. Negotiations between South Korea and the U.S. have progressed on the finer details of their trade agreement, with both sides reaching a provisional understanding on cash investments in the U.S. The tariff rate is expected to be lowered to 15% once the agreement is formalized.
On October 26, U.S. officials published further details on the trade framework agreement with Vietnam. Under the agreement, the U.S. has agreed to reduce tariffs on most Vietnamese goods to 20%. Certain Vietnamese imports will be exempt from tariffs altogether, though the list of these products has not yet been released. In return, Vietnam has pledged to cut tariffs on U.S. goods to 0% and to grant preferential market access to U.S. companies, consistent with earlier commitments.
Additionally, trade agreements with Malaysia and Cambodia have now taken effect. Under the agreements, both countries will lower tariffs on U.S. goods such as vehicles, metals, manufactured products, and farm commodities. In return, the U.S. will reduce its tariffs on both countries to 19% and grant exemptions for certain agricultural and industrial goods, including Malaysian palm oil. The agreements include commitments by Malaysia and Cambodia to increase purchases of U.S. products, including Boeing aircraft; to recognize U.S. regulations and certifications for vehicles and farm goods; and to refrain from enacting laws targeting U.S. technology companies. Additionally, both nations have pledged to strengthen environmental and labor standards. Malaysia will also invest $70 million (€60.9 million) in the U.S.
Lastly, Thailand has signed a trade framework agreement that has not been finalized. The framework features similar terms to the agreements reached with Malaysia and Cambodia after Thailand committed to cut tariffs on U.S. goods, ease regulations on U.S. companies, and increase purchases of Boeing aircraft and agricultural products. Thailand further signed a separate memorandum of understanding to develop the country’s rare earth minerals industry.
U.S. threatens additional 10% tariff on Canada and extends negotiations deadline with Mexico
The U.S. halted all negotiations with Canada on October 25 and warned it may impose an additional 10% tariff, raising the total to as much as 45% on goods not compliant with the U.S.–Mexico–Canada Agreement (USMCA). The move followed an advertisement opposing U.S. tariffs that was sponsored by the provincial government of Ontario. Although Canadian Prime Minister Mark Carney has expressed openness to further negotiations, President Trump confirmed he does not have any current plans to continue talks.
However, American and Mexican negotiators continue to work towards an agreement. On October 28, officials announced that the U.S. will extend its negotiation deadline with Mexico by several weeks to address remaining issues. U.S. negotiators are reportedly prioritizing about 54 non-tariff trade barriers imposed by Mexico, including those related to intellectual property protection. The exact date of the new deadline has not been disclosed at the time of writing. If no agreement is reached and the extension is not renewed, the United States plans to increase tariffs on Mexican goods not covered by the USMCA from 25% to 30%.
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