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Donald Trump Announces Trade Deal With China, How Will it Impact India?

Donald Trump: In a high-voltage post on his social media platform, former U.S. President Donald J. Trump declared that a new trade deal with China has been finalized, pending only final approval between him and Chinese President Xi Jinping. Trump, known

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Neha Kumari
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Donald Trump

In a high-voltage post on his social media platform, former U.S. President Donald J. Trump declared that a new trade deal with China has been finalized, pending only final approval between him and Chinese President Xi Jinping. Trump, known for his bold and direct communication, posted: 

“OUR DEAL WITH CHINA IS DONE, SUBJECT TO FINAL APPROVAL WITH PRESIDENT XI AND ME. FULL MAGNETS, AND ANY NECESSARY RARE EARTHS, WILL BE SUPPLIED, UP FRONT, BY CHINA. LIKEWISE, WE WILL PROVIDE TO CHINA WHAT WAS AGREED TO, INCLUDING CHINESE STUDENTS USING OUR COLLEGES AND UNIVERSITIES (WHICH HAS ALWAYS BEEN GOOD WITH ME!). WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%. RELATIONSHIP IS EXCELLENT!”

Key Highlights of the Deal:

Rare Earth Elements: China to supply “full magnets and any necessary rare earths” upfront, crucial for tech and defense industries.

Educational Access: U.S. to allow Chinese students to continue using American educational institutions.

Tariff Structure: U.S. claims it will receive 55% in tariffs while China will get 10%.

Trump touts the current U.S.-China relationship as “excellent.”

Global Reactions and Indian Concerns

The announcement has triggered mixed responses globally, with many questioning the asymmetry in tariff benefits and the strategic implications of rare earth dependency. For India, the deal presents both challenges and opportunities.

What This Means for India:

Rare Earth Dependency: The U.S. deal may increase global competition for rare earths, which are critical for electronics, electric vehicles, and defense manufacturing. India must strengthen its own rare earth extraction and processing capacities.

Trade Diversions: The softening of tensions between the U.S. and China could reduce Indian exports to the U.S. that benefitted from the earlier trade war.

Educational Exchange: With the U.S. reiterating its welcome of Chinese students, Indian students might face stiffer competition in American universities.

Strategic Realignment: The U.S.-China rapprochement could shift geopolitical balances, affecting India’s positioning in Indo-Pacific strategies.

While the final contours of the deal remain to be confirmed, it signals a possible recalibration in U.S.-China ties, potentially redrawing economic and diplomatic equations in Asia.

As Trump eyes a political comeback in 2024, the deal may also serve as a campaign pitch, highlighting his ability to negotiate “tough but beneficial” international pacts.

Donald Trump