Donald Trump just pulled off what he’s calling the deal of the century, an official end to the world’s biggest trade war, one he kicked off himself years ago.
In a surprise announcement posted to Truth Social, Trump declared that the trade deal is finally done, subject to final approval with President Xi Jinping. The tone? Triumphant. The details? Still murky. But the former president says the relationship with China is now “excellent,” marking a dramatic shift from months of bruising tariffs and economic tension.
The announcement came after two intense days of closed-door negotiations in London between U.S. Treasury Secretary Scott Bessent and China’s Vice Premier He Lifeng. According to Trump, China has agreed to supply all rare earth minerals “up front,” and the U.S. will allow Chinese students access to American colleges again. “Which has always been good with me!” he added, never one to pass up a side comment. Trump also boasted about new tariff terms, America gets a hefty 55% rate while China settles at just 10%. That sounds like a win, but experts and skeptics alike are waiting to see what that actually means in practice.
This “historic” resolution comes after years of economic tit-for-tat between the two superpowers. Just last month, tariffs were still sky-high. The U.S. had 30% tariffs in place on Chinese imports, down from the jaw-dropping 145% peak, and China had reduced its own from 125% to 10%. So, yeah, this truce is a big deal. But it’s also got people wondering: what changed? And what happens next?
The trade war wasn’t just between China and the U.S. Trump basically took on the entire planet. On April 2, he slapped 10% tariffs on nearly every country, sparking global panic. Canada and Mexico got hit with 25%, leading to tense showdowns with both countries. But China, being the world’s largest manufacturer and America’s go-to for everything from smartphones to toys, got the harshest blow. China fought back fast, triggering the kind of back-and-forth that made global markets jittery and forced manufacturers to rethink supply chains altogether.
Trump always insisted the trade war was about putting money back in America’s pocket and boosting U.S. manufacturing. Critics called it reckless, but Trump doubled down with threats and tariffs that rocked the world economy. At one point, the U.S. even imposed a 145% fee on certain Chinese goods. The whole thing was dramatic, chaotic, and at times, confusing.
So, what cooled things off? Turns out, a friendly phone call with Xi Jinping helped kickstart the peace process. Trump said it was a “very good” call and that the Chinese president even invited him and Melania to visit China. Trump returned the favor, inviting Xi and his wife to the U.S. for a diplomatic exchange that sounds more like a reunion than a tense negotiation. He hasn’t been to China since 2017, but this new trip might be on the horizon soon.
Now about those trade deal specifics, don’t expect a full breakdown just yet. U.S. and Chinese officials say it mostly reverts back to a previous agreement reached in Geneva back in May, which had been shelved as tensions escalated. But that hasn’t stopped Trump from selling it hard. On Truth Social, he hyped the deal as a massive win and claimed it’s all thanks to his bold strategy. According to him, rare earths will flow freely, U.S. universities will welcome back Chinese students, and tariffs will favor America in a big way.
There’s no denying the economic war between these two giants took a toll. In 2023 alone, the U.S. imported around $427 billion worth of goods from China. That included 78% of all smartphones. Fears over rising prices on electronics, toys, and even fashion items became a reality as businesses and consumers alike bore the cost of steep import taxes. China’s retaliatory tariffs didn’t help either, especially with key American exports like cars and farm goods caught in the crossfire.
And this wasn’t just about economics, it got personal. Trump repeatedly accused China of not doing enough to stop fentanyl production, blaming the country for America’s opioid crisis. China clapped back, calling fentanyl an American issue and filing a lawsuit against the U.S. with the World Trade Organization. Now, with the trade deal apparently bringing everything back to the table, it’s unclear how much of that bad blood will linger.
Trump also reignited trade conflicts with Canada and Mexico early this year, slapping 25% tariffs in response to what he claimed was their failure to curb drug trafficking and illegal immigration. Canada fired back with $155 billion in tariffs of their own and threatened to cut off electricity to three northeastern U.S. states. Tensions got so heated that Ontario Premier Doug Ford threatened to shut down the grid entirely. Things eventually cooled down when both sides agreed to renegotiate.
Mexico, meanwhile, avoided the full brunt of Trump’s tariff threats, twice. President Claudia Sheinbaum’s aggressive crackdowns on drug trafficking and border control won her a pause on the levies. Trump praised her efforts but warned that on April 2, all bets were off and new tariffs would hit everyone. So, the fact that the China deal came together now, just weeks after those renewed threats, feels like a calculated pivot.
Still, not everyone’s buying the celebration. The real question is, what did America actually gain in exchange for dialing back such aggressive trade stances? If China agreed to provide rare earth minerals and accept more U.S. goods, that sounds great. But will it be enforced? And what happens if tensions flare up again?
Either way, Trump is already framing the deal as a major win heading into the election season. He’s banking on the optics of a strong U.S. economy and restored global leadership to help fuel his campaign comeback. Whether voters, and markets, agree, remains to be seen.
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