Trump has the capacity to retaliate against those who irritate him, according to Howard Lutnick.
Trade Warde Down: The US-China Truce, Unpacked
Commerce Secretary Howard Lutnick, fresh from helping hammer out a US-China trade agreement in London, declared on Wednesday that President Trump had given his team the green light to soften their hardline stance against China, to secure a deal.
In an exclusive interview with CNBC, Lutnick, since the agreement's announcement on Tuesday night, noted that the world's two biggest economic powers had made significant strides after 25 hours of negotiations over two days with Chinese counterparts. Both nations, Lutnick explained, had been alleging each other's breaches of the Geneva deal's terms, culminating in increased tariffs on various goods.
"The Chinese had these rare-earth magnets and were playing it slow," Lutnick revealed. "When they didn't deliver on rare-earth magnets, we retaliated with our countermeasures." He described the talks as respectful, free from tantrums or theatrics, and both sides believed that they'd scored a win-win.
"But," Lutnick cautioned, "we had to make sure when China flashed their rare-earth magnet card, we countered with one that said, 'you just can't do that to America.'"
He explained how the Trump administration could've opted for stronger measures, like pressuring Chinese banks to disclose records or imposing restrictions on ethane exports, a sought-after commodity that accounts for 98% of China's supply. But Trump opted for a more diplomatic approach.
"Instead of bullying China, Trump chose to go all positive," Lutnick said of the President's strategy.
In exchange for China's commitment to immediately grant temporary licenses for any US company requesting rare-earth magnets, used in a multitude of electronics, automobiles, MRI contrast dyes, and jet engines, the US agreed to remove some export restrictions, including ethane—but only excluding AI semiconductors, which are deemed sensitive.
Lutnick shared that the luxurious Lancaster House's opulence provided a sense of familiarity during negotiations. "The room we were in, every inch of it was gold-leafed. It was the perfect place to negotiate a Trump deal," he quipped.
Despite the agreement, Lutnick reminded that US tariffs on China remained and that some export controls still applied." China played the rare-earth card, but President Trump holds even more cards, and because he has the largest economy, he wields more power," Lutnick concluded.
Shifting Priorities
With a US-China trade framework now in place, the Trump administration is now turning its focus to other trade pacts. These deals could surface as early as next week, Lutnick revealed.
"We had our top guns, Scott Bessent, Jamieson Greer, and I locked in negotiations with the Chinese for 25 hours, and we're not exactly making progress on other deals right now," Lutnick admitted. "But you'll soon see a steady stream of deals—next week, the week after, and beyond."
Lutnick declared that the White House's trade negotiation team was in a strong position for deals with multiple countries. Bessent has reportedly divulged that the administration is actively negotiating with 18 trading partners after reaching tentative agreements with the UK and China.
Since Trump paused his “reciprocal” tariffs on April 9, negotiations have been ongoing, with talks reaching a heightened urgency as the July 8 deadline looms. However, the administration continues to hint at upcoming deals, with little progress to show for it to date. Lutnick asserted that Trump wasn't in a rush for any single deal, preferring to focus on securing deals that heavily benefit American businesses and consumers.
"We aren't settling for 'good' deals for the US. We want 'great' deals—deals that elevate America," Lutnick emphasized. "But, we're not rushing into anything. Trump only accepts perfection, and we'll deliver."
The key focus, according to Lutnick, is removing trade barriers and tariffs imposed by partner countries, which have limited American exports and fueled a $1.2 trillion trade deficit. "Our goal is to open up export opportunities and put an end to this trade deficit," Lutnick concluded.
- The Trump administration is now focusing on other trade pacts after reaching a US-China trade agreement.
- Scott Bessent, Jamieson Greer, and Howard Lutnick are reportedly locked in negotiations with 18 trading partners, following tentative agreements with the UK and China.
- Lutnick emphasized that the White House's trade negotiation team is in a strong position for deals with multiple countries, with a goal of removing trade barriers and tariffs to open up export opportunities and eliminate the $1.2 trillion trade deficit.
