Trump predicts 'fantastic' trade deal with China

21/10/2025 04:33 AST

President Donald Trump expressed confidence on October 20, 2025, that he would soon secure a "fantastic" trade deal with China despite ongoing tensions over tariffs and rare-earth minerals.

Speaking to reporters at the White House, Trump said: "I think we're going to end up having a fantastic trade deal with China," signaling optimism amid a protracted trade war marked by successive tariff hikes and Chinese restrictions on critical mineral exports.

The backdrop to this announcement includes Trump's imposition of tariffs reaching 57% on Chinese imports, escalating tensions that prompted China to restrict exports of rare-earth minerals vital to electronics and military equipment.

Threat to raise tariffs further
In response to China's export controls announced on October 9, Trump issued a threat to raise tariffs on Chinese goods to as high as 157% if a deal was not reached by November 1.

On the same day as his statement, Trump met with Australia's Prime Minister Anthony Albanese to unveil a collaborative $1 billion investment focused on processing rare-earth minerals.

This bilateral effort aims to reduce reliance on China by boosting alternative supply chains for these strategic materials.

The trade conflict has severely impacted U.S. agricultural exports, with Chinese retaliatory tariffs virtually halting their import of American farm products.

Geopolitical tensions
Soybeans, one of the largest US agricultural exports to China, have been particularly affected.

Trump acknowledged the harm, stating, "They stopped buying our soybeans because they thought that was punishment. It is punishment to our farmers, but we're not going to allow that to happen."

While the trade war continues to weigh on sectors from agriculture to technology, Trump's confident pledge of a forthcoming deal appears intended to bolster market confidence and signal willingness to negotiate.

Rare earth minerals in focus
Analysts note, however, that both tariff measures and geopolitical tensions over rare-earth mineral supplies remain significant hurdles to a swift resolution.

In summary, the President's remarks underscore ongoing efforts to navigate complex trade disputes with China, with rare-earth minerals and tariffs at the heart of negotiations.

The new partnership with Australia highlights a strategic pivot to diversify critical supply chains, while agricultural sectors await relief from retaliatory measures as the November deadline for a potential agreement approaches.

AFP