U.S. and China Reach Trade Consensus After High-Level Talks in London

The U.S. and China have reached a trade consensus after two days of talks in London. The framework must be approved by both presidents before implementation. This follows a mid-May agreement to pause new tariffs for 90 days. Key issues like rare-earth exports and advanced tech sales remain important discussion points as parties express cautious optimism about moving forward.

In a significant development, the U.S. and China have reached a consensus on trade matters following high-level discussions held over two days in London. This agreement, as reported by representatives from both countries, sets the stage for a framework to be reviewed by President Donald Trump and President Xi Jinping before moving forward with its implementation. The talks come on the heels of a truce in mid-May, which established a 90-day break from imposing new tariffs.

During the meetings, U.S. Commerce Secretary Howard Lutnick announced, “We have reached a framework to implement the Geneva consensus and the call between the two presidents.” His statements mirrored those of Li Chenggang, China’s international trade representative and vice minister of the Commerce Ministry, who echoed similar sentiments. The high-level nature of these discussions indicates a serious intention to mitigate trade tensions.

Late last week, Trump and Xi engaged in a telephone conversation, addressing the fragile state of the relationship characterized by mutual accusations of violations concerning the Geneva trade agreement. Their dialogue was instrumental following a mid-May meeting in Switzerland, wherein both nations agreed to pause new tariffs for three months, alongside retracting certain economic measures that were previously enacted.

Lutnick and U.S. Trade Representative Jamieson Greer are expected to return to Washington, D.C. to seek presidential approval for the newly established framework. “If Xi also approves it, then we will implement the framework,” Lutnick confirmed. The necessity for internal discussions is highlighted by economist Jianwei Xu of Natixis, who acknowledges that while an agreement on a framework suggests a genuine commitment to continued dialogue, any tangible outcomes remain uncertain.

Moreover, Lutnick pointed out that the restrictions China places on rare-earth exports to the U.S. are crucial to this agreement, emphasizing that he anticipates that matter will be resolved during the framework’s execution. He further mentioned that recent U.S. limits on advanced tech sales to China might be lifted once China grants approval for rare-earth exports, showcasing the interconnected nature of these negotiations.

Interestingly, after Lutnick’s comments, there was a noticeable delay in coverage from China’s state media, which usually is swift to report on such high-profile communications. Only after an hour did they release a less prominent acknowledgment of the talks, attributing comments to Vice Commerce Minister Li, who stated the discussions had helped to foster bilateral trust.

As the trade discussions progress, U.S. Treasury Secretary Scott Bessent was reported to be returning to the U.S. to prepare for Congressional testimony. Important figures involved in the trade negotiations also included China’s Vice Premier He Lifeng and Minister of Commerce Wang Wentao, adding another layer of significance to these discussions. Meanwhile, market reactions showed Chinese stocks, represented by the CSI 300 index, slightly rising, while U.S. stock futures faced declines as investors awaited further details on the newly agreed trade framework.

In summary, the U.S. and China have made notable strides in their trade negotiations, reaching a framework agreement after two days of talks in London. With the framework pending approval from both presidents, there is cautious optimism in the air. However, key issues, such as rare-earth exports and tech sales, still need resolution, signaling that while progress has been made, the road ahead may prove complex. Investors and analysts alike eagerly anticipate the next steps in this evolving trade relationship.

Original Source: www.nbcsandiego.com

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