"The retaliation measures, cooked up by Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, included a ban on critical American aircraft parts, semiconductors and a petrochemical called ethane, which China uses to make plastic.
Secretary of State Marco Rubio also threatened to “aggressively revoke” visas for Chinese students.
Every couple of days there was new payback from the US, as Trump ratcheted up the pain in stages.
The pain was what finally brought the Chinese back to the table this week.
In addition to punishing tariffs, the payback measures hit the already sluggish Chinese economy hard.
Export growth is down more than 30%, and factory activity reportedly is slowing, while domestic demand is weak.
By last week, when Trump and Chinese President Xi Jinping had a long, conciliatory phone call, China had 250 planes grounded and another 250 planes a week due to become inoperable.
After the call, Trump declared that he wants to “open up China” and dispatched Bessent, Lutnick and trade envoy Jamieson Greer to London for truce talks with a Chinese delegation led by Vice Premier He Lifeng.
But in the end, they did the deal — or at least de-escalated tensions in preparation for a final trade agreement between the world’s two biggest economies.
China will resume supply of the magnets and critical rare earths “up front,” and Chinese students will be welcome again at US colleges and universities, the president wrote on Truth Social Wednesday morning.
The other pain points will ratchet down over time.
“OUR DEAL WITH CHINA IS DONE, SUBJECT TO FINAL APPROVAL WITH PRESIDENT XI AND ME. FULL MAGNETS, AND ANY NECESSARY RARE EARTHS, WILL BE SUPPLIED, UP FRONT, BY CHINA. LIKEWISE, WE WILL PROVIDE TO CHINA WHAT WAS AGREED TO, INCLUDING CHINESE STUDENTS USING OUR COLLEGES AND UNIVERSITIES (WHICH HAS ALWAYS BEEN GOOD WITH ME!). WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%. RELATIONSHIP IS EXCELLENT! THANK YOU FOR YOUR ATTENTION TO THIS MATTER!”
Wall Street rallied at the news, although there is still work to flesh out the rest, with tariffs to stay at levels agreed to in Geneva, potentially yielding $250 billion annually.
It was an important test for the cohesion of the US side, which Trump has had an eye on lately.
While Trump’s detractors bemoan his upending of world trade, Bessent describes the president’s approach as “strategic uncertainty,” which can yield surprising benefits. Despite the angst, so far it seems to be paying off."
NYP
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