The US and China have agreed to a trade deal, agreeing to lift Beijing’s tariffs and export restrictions on rare earth metals. At the same time, overall progress remains limited, informs Reuters.
According to US Commerce Secretary Howard Lutnick, following the negotiations in London on June 10, the document fleshes out the agreements reached in Geneva in June, which provide for the relaxation of mutual tariffs that exceeded 100%.
However, the implementation of the Geneva agreements has been complicated by Beijing’s restrictions on the export of critical minerals. This led to the imposition by Washington of restrictions on the export of technological products to China. Lutnik said that as part of the agreement reached in London, the United States agreed to partially cancel the retaliatory restrictions, but the details are not being disclosed at this time.
He noted that the framework document agreed in London will be submitted to the leaders of both states for approval. If approved by US President Donald Trump and Chinese President Xi Jinping, the parties will proceed to implement the framework agreement.
Chinese Vice Minister of Commerce Li Chenggang also confirmed the achievement of an agreement in principle on the implementation of the decisions agreed by the leaders of the countries in a telephone conversation on June 5 and during the talks in Geneva.
Despite the positive signal for markets, experts say the deal does not resolve strategic differences between the two sides, including over Donald Trump’s unilateral tariffs and long-standing US complaints about China’s state-run, export-oriented economic model.
Josh Lipsky, senior director of the Atlantic Council’s Center for Geoeconomics in Washington, said that the parties left Geneva with fundamentally different views on the terms of the agreement and that they needed to specify the necessary actions.
Lipsky noted that the parties have until August 10 to agree on a more comprehensive agreement to reduce trade tensions, otherwise the tariff rates will rise again: from about 30% to 145% on the American side and from 10% to 125% on the Chinese side. Analysts emphasize that the achievement of the framework agreement reduces the risks of further escalation of the trade war, but its successful implementation will depend on the political will of the leaders of both countries.
