US and China Reach Trade Framework Ahead of Presidential Approval

Officials from Beijing and Washington convened in London to draft a framework aimed at easing a tense trade environment.

Top officials from the United States and China have made strides in improving their strained trade relations, concluding two days of negotiations in London with a proposed framework for reducing trade tensions. US Commerce Secretary Howard Lutnick announced that the deal aims to resolve ongoing disputes over rare earth minerals and magnets, which are vital components in modern technology. The framework will now be presented to Presidents Donald Trump and Xi Jinping for final approval.

The discussions focused primarily on China's exports of rare earth minerals, a topic of significant importance given their critical role in manufacturing electrically powered devices, from smartphones to electric vehicles. This meeting comes on the back of a temporary truce that both nations had previously agreed to, although tensions have resurfaced since then, with each side accusing the other of failing to uphold their end of the bargain.

China has faced criticism from the US for allegedly delaying the release of vital mineral exports, while the US has imposed restrictions on technology sales, particularly in the fields of semiconductors and artificial intelligence. "We have reached a framework to implement the Geneva consensus," Lutnick shared with the press. He emphasized that the next steps depend on presidential approval before moving to implementation.

This latest round of talks follows a recent phone conversation between Trump and Xi, during which they maintained that a strong mutual understanding was established. China's Vice Commerce Minister, Li Chenggang, affirmed that a consensus had been reached regarding their discussions in London, aligning with earlier talks held in Switzerland that called for temporary allowances in trade tariffs.

The history of tariff conflicts saw dramatic increases from both sides, with China's retaliatory tariffs on US imports soaring to 145%. Despite initial commitments aimed at stabilizing trade, disputes regarding export restrictions and tariffs have persisted. US Trade Representative Jamieson Greer highlighted ongoing concerns about China’s adherence to the agreement, while Beijing pointed out US violations involving sales of technology to Chinese firms.

As part of recent steps, China announced the approval of various applications for rare earth export licenses, though specifics remain undisclosed. On the eve of these negotiations, Trump indicated that Xi was committed to rekindling trade in rare earth materials, hinting at a potential return to more stable economic relations between the two superpowers.