Senior representatives from both the United States and China revealed on Tuesday that they had come to an understanding on a “framework” aimed at progressing trade relations. These announcements followed two days of intense discussions in London, intended to ease long-standing economic disputes.
US Commerce Secretary Howard Lutnick sounded confident after a day of dialogue, expressing belief that the difficulties involving rare earth resources and magnets “will be resolved” as the arrangement moves into action.
However, the proposal must first secure the approval of top authorities in Washington and Beijing, officials indicated, as the diplomatic talks concluded at Lancaster House in the heart of London.
Both nations had struggled to break a deadlock over export restrictions, and attention was fixed on whether either side would make concessions. American officials had earlier raised concerns that Beijing was deliberately delaying clearances for rare earth shipments.
As the planet’s two economic heavyweights sought to halt their escalating tariff skirmish, with duties presently paused on a temporary basis, the hope for a durable agreement remained central.
“We’re moving as quickly as we can,” US Trade Representative Jamieson Greer told reporters.
“We would very much like to find an agreement that makes sense for both countries,” he added, noting that the relationship was complex.
“We feel positive about engaging with the Chinese,” he maintained.
Speaking separately to reporters, China International Trade Representative Li Chenggang said: “Our communication has been very professional, rational, in-depth and candid.”
Li expressed hope that progress made in London would help to boost trust on both sides.
– Constructive Negotiations –
US Treasury Secretary Scott Bessent had earlier described the closely-monitored talks as fruitful, even though scheduling demands required him to leave London while discussions were ongoing.
Bessent, alongside Lutnick and Greer, led the American delegation but was called back to Washington for Congressional testimony, according to a US official.
China’s negotiating team was headed by Vice Premier He Lifeng, accompanied by Li and Commerce Minister Wang Wentao.
No fresh meeting dates have yet been set by either side.
Still, Lutnick remarked that the US restrictions enacted when rare earth shipments “were not coming” could be eased if Beijing advanced with additional license approvals.
Global financial markets were uneasy but saw a modest rise in major US indexes on Tuesday amid optimism over a breakthrough.
This London session followed earlier discussions held in Geneva, where both countries had momentarily agreed to cut tariffs.
This time around, rare earth exports from China essential for items such as smartphones, electric vehicle batteries, and environmentally friendly technology were a central focus.
“In Geneva, we had agreed to lower tariffs on them, and they had agreed to release the magnets and rare earths that we need throughout the economy,” US President Donald Trump’s top economic adviser, Kevin Hassett, told CNBC on Monday.
Even though Beijing was releasing some supplies, “it was going a lot slower than some companies believed was optimal,” he added.
Both countries “have developed almost a mirror arsenal of trade and investment weapons that they can aim at each other,” said Emily Benson, head of strategy at Minerva Technology Futures.
As they make use of economic levers in their contest for global influence, she said, expecting a conventional trade pact might not be realistic.
Nonetheless, possibilities exist for reducing friction between the two powers.
A cooling of tensions may include improved Chinese procedures for handling export control permits, Benson noted. She remarked that Beijing might lack enough personnel to handle the volume of applications effectively.
For the US, this might involve loosening certain high-tech export restrictions, she added.
However, caution persisted among analysts, with Thomas Mathews of Capital Economics warning that Washington would likely not “back off completely.” Market uncertainty could linger as a result.
Since returning to office, Trump has imposed a 10 per cent duty on multiple trading partners, threatening higher tariffs on numerous economies.
These levies have dampened commerce, with Chinese figures showing a sharp drop in shipments to the US during May.
The World Bank on Tuesday aligned with other global bodies in reducing its forecast for 2025 global economic growth amid continued trade instability.
China is simultaneously holding discussions with other nations, including Japan and South Korea, in an attempt to form a collective stance in response to Trump’s trade policies.
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