Thread by @karlmehta

Major Breakthroughs in US-China Trade Negotiations.

The critical minerals standoff just ended with a breakthrough agreement signed yesterday.

Trump secured THREE key commitments from Beijing the media isn't reporting.

You won't believe what you're about to hear.

A Thread 🧵

After two months of economic warfare that crippled American factories, US and Chinese negotiators met in London this week.

The result? A framework agreement that changes everything.

But the strategic implications run much deeper.

Context is critical.

April 4: China imposed export licensing on seven rare earth elements essential for defense systems, automotive production, and clean energy.

The economic weapon was devastating.

Immediate impact was severe.

Ford shut down Explorer production for one week due to shortages.

European auto suppliers ceased operations as stockpiles hit 40-60 days remaining.

Industrial production faced serious constraints.

National security implications were significant:

Samarium is essential for F-35 fighter jet construction.

Without Chinese exports, production of America's most advanced stealth fighter would halt completely.

China controlled critical defense supply chains.

Both sides kept escalating until something unexpected happened.

After a phone call between Trump and Xi, China blinked.

The London talks produced three major commitments.

Commitment #1: China agreed to resume rare earth exports "up front" through an expedited licensing system.

Within days, suppliers to GM, Ford, and Stellantis received export clearances.

Crisis averted - but that's just the beginning.

Commitment #2: China accepted a massive tariff imbalance.

They'll maintain only 10% tariffs on US goods while accepting 55% US tariffs on Chinese products.

Beijing calculated they hold enough leverage to absorb the hit.

Commitment #3 is perhaps the most revealing.

China agreed to "work closely together" to open their markets to American trade.

Language that positions Xi as Trump's equal on the global stage.

Beijing just achieved parity with the world's superpower.

This isn't just about preventing factory shutdowns.

It's about a fundamental shift in the US-China power dynamic.

Chinese state media declared: "Nations with 5,000 years of statecraft don't fold to bullying. They negotiate as equals."

The bigger story? America's strategic position deteriorated.

China's manufacturing sector now outpaces major global economies combined.

They've reduced dependence on US supplies everywhere except advanced semiconductors.

The tables have turned.

But Trump signaled a longer-term strategy during the announcement:

"We have one coming up maybe with India. Very big one."

India just became the world's 4th largest economy with $4.19 trillion GDP, surpassing Japan.

The India opportunity is substantial:

Indian investment has already created 425,000 American jobs and $40 billion in direct investment.

Bilateral trade reached $191 billion in 2022, targeting $500 billion by 2030.

A critical alternative to Chinese supply chains.

What happens next is critical.

Both countries avoided immediate catastrophe:

• Auto production resumes
• Defense contractors get critical supplies
• Clean energy projects proceed
• Global supply chains stabilize

The ultimate test will come in the next crisis.

Will America have built alternatives?

Will China weaponize dependencies again?

Let me know what you think in the comments.

The rules of economic warfare are being rewritten, and this is just the beginning.

Thanks for reading.

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https://twitter.com/20891198/status/1938590675022602625

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