Trump Says the Deal Is Done… But the Real Battle Over Chips and AI Hasn’t Even Begun

Who would've thought after the Elon/Trump debacle, we'd see Trump and Xi Jingping settle their disputes in just a couple of days over some tea and biscuits. What a strange world we live in. And yet… here we are. Just days after Trump’s war of words with Elon Musk (where he basically accused the world’s richest man of being a “bullsh*t artist” who owes his entire fortune to government handouts) we’ve now arrived at this: Trump shaking hands with China and becoming reasonable.

The same China that’s been locked in a multi-year trade standoff with the U.S., complete with tit for tat tariffs, semiconductor bans, and ongoing disputes over trade imbalances and technology access. All of it was apparently fixable over a 48-hour negotiation session in London.

Not even a week ago, the U.S. and China were accusing each other of breaching a truce they agreed to back in May. Trump’s camp said China wasn’t moving fast enough on rare earth mineral exports (the stuff you need to make iPhones, EVs, military tech, etc). On the other hand, China said the U.S. was still blacklisting Chinese tech firms like Huawei, new restrictions on semiconductor design software, and a wave of revoked student visas for Chinese nationals… many of whom had already been accepted to U.S. universities for the fall.

And yet somehow, despite all that, Trump took to Truth Social this morning and declared: “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!).”

That’s it. That’s the post. No mention of semiconductors. No update on AI tech restrictions. Just magnets and grad students (the most important things when it comes to the economy and the stock market).

For those keeping score: the U.S. is still holding the line on chip exports, while Trump’s newly recalibrated 55% total tariff package remains in place (a jigsaw puzzle of penalties that includes 20% on illegal drugs, 10% base tariffs, and 25% from preexisting duties). On the other hand, China is holding steady at 10% tariffs on U.S. goods.

Now before you put back on your “STONKS ONLY GO UP” shirt, not much has actually changed. The whole thing feels like a highly staged optics win for both sides. Trump gets to say he secured critical minerals “up front” and brought Chinese students back into the fold (conveniently leaving out that a federal court just upheld his right to keep those tariffs in place). China, on the other hand, gets a PR win by “cooperating,” while still being blocked from the tech that actually matters to its long-term plans.

Oh, and let’s not forget that the last “framework” the two agreed on (in Geneva, in May) came with a 90-day clock to finalize a deal… which both sides promptly accused each other of violating. But hey, if a couple of hotel room negotiations in London can revive a deal that was already on life support, who am I to question the magic of diplomacy?

Just don’t ask what happens when that 90-day deadline expires in July. Or when the topic shifts from rare earths to, you know… actual tech policy. This is far from over.

At the time of publishing this article, Stocks.News doesn’t hold positions in companies mentioned in the article.