New developments in China-U.S. trade negotiations: protocol pending approval, rare earths and tariffs become the core.

On June 11, a preliminary trade agreement between the United States and China, unilaterally announced by President Trump, brought a brief respite and deeper uncertainty to the global markets. The agreement made key concessions on rare earth supply but at the cost of an extremely unbalanced tariff structure, fully exposing the complex reality of the game between the two sides at the levels of high technology, economy, and geopolitics.

At the same time, the controversial new immigration policy introduced by the Trump administration domestically, along with the subtle shifts in its relationship with tech giant Elon Musk, together contribute to the high uncertainty of its policies during the second term.

The compromise and cost of the protocol: rare earths for tariffs

According to Trump's statement on his social platform Truth Social, the core of the protocol is a strategic exchange.

China's rare earth "trump card" is effective. The protocol stipulates that China commits to "provide all magnets and any necessary rare earth materials in advance." This move aims to alleviate the severe supply chain crisis faced by the U.S. in high-tech, military, and electric vehicle industries since China implemented export controls in April 2025. Major automakers like General Motors and Ford once faced the risk of production line shutdowns due to this, highlighting the deep dependence of the U.S. on China for this strategic resource. While this clause is a "desperately needed item" for the U.S., the stability of its implementation and whether China will completely lift the controls remains uncertain.

The extremely unbalanced tariff structure has become the focus. In exchange, the protocol sets the U.S. tariff on China at 55%, while China's tariff on the U.S. is only 10%. Although this rate is a significant decrease from the previously rumored 145%, it is still far higher than the average level of about 19.3% during Trump's first term. Goldman Sachs analysis suggests that this move will significantly drag down the Chinese economy, while American consumers will also inevitably have to pay for the high import costs. In addition, the clause in the protocol allowing Chinese students to return to U.S. universities has been interpreted by the outside world as a gesture of easing, but its symbolic significance outweighs the substantive concession.

Trump reserved the option in his statement that "the protocol must be finally approved by both leaders," which is seen as a continuation of his signature strategy of "the art of the deal," leaving room for future adjustments to policy and adding uncertainty to the final implementation of the protocol.

Trump's Domestic Agenda: The "Gold Card" Plan and Social Divisions

On the same day, the highly anticipated "Gold Card" immigration program website officially launched. This program allows foreign investors who pay $5 million to obtain U.S. permanent residency and even a pathway to citizenship.

Supporters believe this move can attract high-net-worth individuals to inject vitality into the U.S. economy, but critics point out that this is a blatant "sale of green cards," which will exacerbate social injustice and may provide a breeding ground for illegal money flows. This policy opens the door to wealth while closing a narrow door to ordinary immigrants, reflecting profound social divisions that may become a lasting point of contention during its term.

Musk and Trump: Can their relationship be repaired?

The relationship between the tech industry and the White House has also been tumultuous. Tesla CEO Elon Musk rarely publicly apologized on the X platform for previous criticism of Trump, stating that his remarks were "too much." This move is seen as a cautious adjustment following Trump's threat to terminate SpaceX's government contracts, which led to a sharp decline in Tesla's stock price.

Musk was once a key supporter of Trump and even briefly held public office. However, his recent actions of cutting political donations and resigning mark a cooling of their relationship. In a public interview, Musk warned that the shortage of electricity in the U.S. would constrain the development of AI and pointed out China's advantage in power generation, which is seen as an indirect challenge to the industrial policies of the Trump administration. The shift from a close ally to a subtle player between Musk and Trump reflects the complex and tense interactions between American tech capital and political power.

Analysis and Outlook: Uncertainty in High-Risk Games

The preliminary agreement between China and the United States is more of a pause in a high-risk game than the beginning of cooperation. China has leveraged its strategic advantage in the rare earth sector to force the United States to compromise on supply chain security; meanwhile, Trump has continued his "America First" economic pressure strategy by maintaining high tariffs.

Looking ahead, the execution details of the protocol, the stability of rare earth supplies, and the pressures faced by the Trump administration both internally and externally will be the focus of ongoing market attention. The global economy, under the dual influence of the fragile balance in China-U.S. relations and internal political tensions in the United States, may see its uncertainty become the new normal.

Disclaimer: This article only represents the author's personal views and does not represent the position or views of this platform. This article is for information sharing only and does not constitute any investment advice to anyone. Any disputes between users and columnists are not related to this platform.

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