Trump Nods to US-China Trade Framework Securing Rare Earth Supply and Student Visa Deal

In the high-stakes chess game of U.S.-China relations, a pivotal move was announced today as President Donald Trump declared a breakthrough in trade negotiations that could reshape global supply chains and financial markets—if it survives the gauntlet of political scrutiny awaiting it.

"OUR DEAL WITH CHINA IS DONE, SUBJECT TO FINAL APPROVAL WITH PRESIDENT XI AND ME," Trump proclaimed on Truth Social on June 11, revealing a framework agreement that concludes marathon negotiations in London but remains contingent on final signatures from both world leaders.

The Mineral-for-Minds Exchange

At the heart of the tentative agreement lies a strategic swap: China will resume supplying "full magnets and any necessary rare earths" to American manufacturers—critical materials that power everything from electric vehicles to missile guidance systems—while the United States will preserve Chinese students' access to American universities, a multibillion-dollar revenue stream for higher education institutions.

The framework maintains asymmetric tariff levels, with the U.S. keeping 55% duties on Chinese imports while China imposes a 10% tariff on American goods—numbers that Trump highlighted as a victory but that analysts view more skeptically.

"What we're seeing is essentially a controlled de-escalation, not a genuine reset," remarked one trade specialist who requested anonymity due to ongoing consultations with negotiators. "Both sides needed a pressure release valve after tariffs reached historically unsustainable levels."

The announcement follows a 90-day tariff truce brokered in Geneva last month, where both economic powers agreed to pause the most punishing retaliatory measures that had seen U.S. tariffs spike to 145% and Chinese duties reach 125% on certain products.

Beneath the Presidential Proclamation

Despite Trump's characteristic triumphalism—"RELATIONSHIP IS EXCELLENT!" he wrote—the arrangement faces substantial hurdles before implementation. U.S. Senate Finance Committee leaders have already demanded hearings, noting that tariff adjustments exceeding 20 percentage points require Congressional consultation under Section 301 authority.

More tellingly, Beijing has maintained a conspicuous silence on the specific terms. While Chinese officials confirmed a "framework consistent with the Geneva truce," they have pointedly avoided endorsing the 55%/10% tariff asymmetry highlighted in Trump's announcement.

"The divergence in messaging isn't accidental," noted a Washington-based China analyst. "Xi needs to present this as balanced diplomacy to domestic constituencies, while Trump's political brand demands visible 'winning.' This narrative gap could still derail everything."

Both sides face an August 8 deadline—when the Geneva truce expires—to transform the framework into binding policy before automatic tariff snapbacks take effect.

Wall Street's Selective Enthusiasm

Financial markets responded with targeted rather than broad-based optimism, reflecting the deal's compartmentalized impact. While the NASDAQ remained essentially flat, companies directly affected by specific provisions saw significant movement.

MP Materials, a leading American rare earth producer, saw its stock drop by 8.51% to 24.89 USD as investors absorbed the implications of resumed Chinese mineral exports. The company's Texas magnet plant, designed as a hedge against Chinese supply dominance, now faces revised cash-flow projections 10-15% lower if Chinese materials flood back into the market.

Meanwhile, for-profit education stocks quietly strengthened as analysts calculated the windfall from restored Chinese student enrollment. U.S. universities lost an estimated $8 billion in tuition revenue during the 2022-2024 visa restrictions, creating potential upside for institutions that can quickly reestablish their Chinese student pipelines.

The Walls That Remain Standing

What's notably absent from the framework speaks volumes about its limitations. The agreement leaves untouched the most contentious technology restrictions, including export controls on advanced AI chips and lithography equipment. Chinese automobile import barriers remain firmly in place, as do U.S. outbound investment screening mechanisms for semiconductor and quantum technology ventures.

"This deal addresses the most acute pain points without tackling the structural issues driving decoupling," observed one portfolio manager specializing in cross-border technology investments. "It's aspirin for a patient that needs surgery."

The cumulative U.S. tariff architecture—a 10% baseline tariff applied to all trading partners, plus legacy Section 301 tranches and a new 15% "fentanyl-precursor" levy on selected Chinese chemicals—still represents a roughly 40 percentage point increase from pre-trade war levels.

The August Deadline Looms

With just 58 days until the Geneva truce expires, both administrations face a race against time. Congressional hearings scheduled for late June will signal the domestic political viability of the framework, while investors await a Beijing State Council notice confirming rare earth export license waivers.

"The market is underpricing the tail risk here," warned a macro strategist at a leading investment bank. "We're seeing a 50% probability of formal sign-off by July, but a 35% chance of a stalled process that reverts to the status quo, and a 15% risk of complete breakdown that could trigger a significant market correction."

Investment Implications: Navigating Uncertainty

For investors seeking to position themselves amid this diplomatic uncertainty, several approaches merit consideration.

The rare earth sector appears particularly vulnerable to volatility. While spot prices for neodymium-praseodymium oxide were already softening at $50-52/kg FOB China last week, analysts expect them to drop another $3-5/kg once export licenses move. However, U.S. defense sector subsidies provide a floor for domestic producers.

Higher education represents a potential bright spot, with for-profit educators like Strategic Education and American Public Education poised to benefit from restored Chinese enrollment. Analysts anticipate enrollment guidance upgrades during third-quarter earnings calls.

A barbell strategy involving Chinese consumer-focused companies (which benefit from improved sentiment) balanced against Chinese exporters (still facing enduring tariffs) offers another tactical approach to the evolving situation.

The prudent investor might consider volatility protection, as the market appears to be pricing in resolution rather than the significant disruption that could occur if negotiations falter before the August deadline.

Past performance is not indicative of future results, and investors should consult financial advisors before making decisions based on geopolitical developments that remain fluid and subject to rapid change.

Concise investor‐focused snapshot of the announced Trump-Xi trade framework

Theme	What Was Announced / Current Status	Key Risks & Unresolved Items	Likely Market / Sector Impact	Probability-Weighted View*
Legal Status	Framework handshake; needs Trump & Xi signatures plus U.S. implementing regs.	Congressional push-back, August-8 deadline.	Binary headline risk for equities and FX.	50 % signed, 35 % watered-down, 15 % collapse.
Tariff Architecture	U.S. keeps cumulative 55 % on China; China holds 10 % on U.S. goods.	Tariffs still punitive, scope creep possible.	Keeps pressure on U.S. import-heavy retail; supports near-shoring trade.	High persistence of elevated tariffs through 2026.
Rare-Earth Supply	China to resume full magnet & rare-earth exports “up front.”	Snap-back if deal stalls; export licences not yet issued.	Softens NdPr prices; negative for ex-China miners (e.g., MP, Lynas).	Short-term bearish on rare-earth prices; medium-term floor via DoD subsidies.
Education Visas	U.S. drops plan to revoke Chinese student visas.	Homeland-security carve-outs could return.	Positive cash-flow shock to U.S. universities & for-profit educators.	High probability (70 %) policy sticks.
Tech & Export Controls (Not Fixed)	AI chips, lithography, EV power electronics still restricted.	BIS could tighten further; China retaliation.	Limited relief for Nvidia/AMD; China fabs still supply-constrained.	Status quo expected ≥12 mo.
Macro Overlay	Minor disinflation (<0.05 pp PCE), marginal lift to global GDP (+0.1 pp).	Breakdown → tariff shock, stronger USD.	Fed path unchanged; EM supply-chain pivot continues.	Base case mild positive, but tails matter.
Positioning Ideas	Fade non-China rare-earth premium; long U.S. higher-ed; barbell China consumer vs. exporter; cheap tail-risk vol.	Slippage past Aug-8 or Senate revolt would reverse trades.	Alpha in pricing outcome probabilities, not headline euphoria.	Review catalysts: Senate hearings (late Jun), State-Council notice, Q3 guidance season.

This fragile framework represents neither the comprehensive reset business leaders hoped for nor the clean break some hardliners advocated. Instead, it offers a tenuous diplomatic bridge that could either strengthen into a durable structure or collapse under the weight of political pressures on both sides of the Pacific. For markets accustomed to binary outcomes, the most challenging path may be the most likely—a prolonged period of uncertainty as two global powers navigate their increasingly complex interdependence.

Trump Nods to US-China Trade Framework Securing Rare Earth Supply and Student Visa Deal