The United States and China have reached an in-principle agreement to ease escalating trade tensions, following two days of high-level negotiations in London.
US Commerce Secretary Howard Lutnick announced that both nations had agreed to a draft framework aimed at resolving key disputes, particularly restrictions on the export of rare earth minerals and magnets, critical components in the global tech supply chain.
“The framework paves the way for implementing the Geneva consensus,” Lutnick told reporters, referring to a prior understanding reached during talks in Switzerland last month.
“Final implementation will depend on approval from Presidents Donald Trump and Xi Jinping,” he added.
The latest breakthrough comes after a series of tit-for-tat tariff hikes this year, which saw levies between the two economic giants surge to historic levels.
While May’s temporary truce brought a partial rollback in tariffs and a 90-day window for resolution, both sides have since traded accusations of non-compliance on non-tariff issues.
Washington has criticized Beijing for allegedly delaying exports of rare earth materials—vital for manufacturing electric vehicles, smartphones, and defense systems. In response, Beijing has accused the US of escalating restrictions on semiconductor access and blocking critical software sales to Chinese firms.
China's Vice Commerce Minister Li Chenggang confirmed the preliminary agreement, noting it was based on directives from a recent phone call between the two presidents on 5 June. “Both sides have reached a framework in principle to carry forward the consensus reached by our leaders,” he said.
Ahead of this week’s talks, Beijing signaled flexibility by approving select rare earth export licences, though details remained undisclosed.
President Trump, speaking last Friday, said President Xi had agreed to resume rare earth trade—an indication that momentum had been building toward a potential resolution.
If endorsed by both leaders, the framework could mark a significant step in stabilizing bilateral trade relations and restoring confidence in global supply chains disrupted by the ongoing standoff.
Source: BBC
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