Latest developments announced in the China-U.S. economic and trade talks: the U.S. suspension of reciprocal tariffs at 24% is extended as scheduled—what other information is worth noting?

Many people claim that building a complete industrial chain is necessary because the service sector cannot support China’s 1.4 billion population—a completely baseless assertion. The U.S. has roughly 160 million employed individuals, of whom about 138 million work in services—meaning services generate 86% of all U.S. jobs. Extrapolated to China’s scale, that would equate to 580 million jobs. China’s manufacturing sector accounts for 30% of global output yet generates only 150 million jobs. To reach 580 million jobs, China would need to monopolize 100% of global manufacturing—an impossibility. The service sector simply creates far more employment than manufacturing—and does not trigger trade frictions. Ford’s High-Wage Theory In 1914, Henry Ford, the renowned American industrialist, raised his factory workers’ daily wage from $2.14 to $5 and shortened their workday from nine to eight hours. He believed higher wages would reduce turnover of skilled labor, lower training costs, boost productivity, and—crucially—enhance workers’ purchasing power, thereby expanding consumer markets and creating a virtuous economic cycle that drives broader societal prosperity. This became known as Ford’s famous “high-wage theory.” Understanding Ford’s high-wage theory clarifies why, among industrial powers of the 1930s, the U.S. stood apart: while others pursued low wages and low consumption—engaging in self-defeating internal competition—the U.S. championed high wages and high consumption. And indeed, the U.S. economy performed best; post–World War II Western nations largely emulated the American model. Today, over one million wealthy individuals and highly skilled professionals still immigrate to the U.S. annually—this inflow remains central to America’s enduring competitiveness. The latest round of U.S.-China negotiations has concluded without major breakthroughs. The preliminary decision is to extend the existing arrangement by 90 days beyond the original August 12 deadline. However, U.S. Treasury Secretary Scott Bessent stated that final approval of the extension remains subject to President Trump’s decision; the two are scheduled to meet in Washington, D.C., on the 30th (U.S. time) to discuss it. “The talks were highly constructive… We’ve established strong interaction, mutual respect, and a deeper understanding of each other’s concerns,” Bessent said, adding that officials from both sides may hold another meeting after the 90-day period. U.S. Trade Representative Jamieson Greer posted on social media that the Chinese delegation was “very pragmatic.” “Our relationship is tense, but holding regular meetings to address these issues lays a solid foundation for negotiations,” he noted. Li Chenggang, Vice Minister of China’s Ministry of Commerce and China’s chief international trade negotiator, also described the exchanges as “in-depth, candid, and constructive.” He stated, “We will continue to push for the scheduled 90-day extension of the U.S.-imposed 24% reciprocal tariffs—which have already been suspended—as well as China’s corresponding countermeasures.” Although both sides conveyed positive assessments, no substantial progress was achieved. Earlier negotiations in Geneva and London had temporarily lowered tariff rates—previously in triple digits—and reached a framework agreement on trade. Both sides also signaled intentions to ease export controls on rare earths and semiconductors. Subsequently, China pledged to accelerate approvals for rare-earth export licenses; the U.S. agreed to resume exports of NVIDIA’s H20 AI chips to China. Regarding China’s easing of rare-earth export restrictions, Bessent stated on the 29th that “the consensus between the two sides is more comprehensive than in the previous two rounds.” In an interview with CNBC, he noted that since April, the U.S. and China have been negotiating a new global export control system for Chinese rare earths, achieving considerable progress—though no final version has yet been finalized, and the U.S. is actively urging China to continue advancing this initiative.

U.S. Commerce Secretary: the 55% tariff on China is now finalized and unchangeable; what comes next focuses on non-tariff measures.

On the same day, U.S. Commerce Secretary Howard Lutnick told CNBC that the 55% U.S. tariff on Chinese goods has been definitively set and will not change. Therefore, future U.S.-China trade talks or communications will center primarily on non-tariff measures—specific content and implementation details that both sides agreed to address under the U.S.-China trade framework reached in London. Yet at present, President Trump has not clearly specified what concessions—if any—the U.S. has made or will make regarding non-tariff measures. Neither China’s official authorities nor its state media have publicly confirmed exactly what substantive agreements were reached. On the evening of June 10, Li Chenggang, Vice Minister of China’s Ministry of Commerce, told reporters in London that the two countries held in-depth discussions aimed at implementing the consensus reached during the leaders’ phone call and the Geneva talks—and that they “reached a framework,” expressing hope that the London talks’ outcomes would “help further enhance mutual trust between China and the U.S.” According to the Associated Press, the so-called “completed agreement” referenced by Trump likely falls short of a formal agreement—and instead constitutes merely a “framework” intended to pave the way for more substantive negotiations ahead. On June 11, Treasury Secretary Bessent testified before Congress, adopting a cautious stance on whether a broader U.S.-China agreement could be reached, stating that doing so would require more time. He added that if China can demonstrate itself to be a “reliable partner in trade negotiations,” the two sides might succeed in rebalancing their trade relationship. Regarding widespread speculation that the U.S. might ease semiconductor export controls in exchange for China resuming rare-earth export licenses, Bessent responded unequivocally: “There is no quid pro quo between chips and rare earths.” Prior to delivering this explanation before Congress, Lutnick—who participated alongside Bessent in the London trade talks—told reporters that the U.S. would consider lifting recently imposed export controls, though he declined to provide specifics. Indeed, the new U.S. export restrictions introduced after the first round of Geneva talks had nothing to do with chips; rather, they included suspending exports of chip design software (EDA), nuclear power components and technologies, revoking visas for Chinese students in critical fields, halting exports of aircraft engine technology, and suspending ethane exports. Following the London talks, Jiangxi Jinhui Permanent Magnet Co., Ltd. announced it had obtained licenses to export magnetic materials, components, and motor rotors—rare-earth products—to the U.S., Europe, and Southeast Asia. This news was widely interpreted as China’s signal of willingness to resume rare-earth exports and ease trade tensions with the U.S. Subsequently, The Wall Street Journal reported that China had set a six-month validity period for its rare-earth export licenses to the U.S.—using this as leverage against the U.S. and introducing uncertainty for American industry.

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