U.S. and China Reach Trade Framework Consensus After London Talks

The U.S. and China have agreed on a trade framework after talks in London, pending approval from both presidents. This follows a prior agreement to halt tariffs for 90 days. Key issues include rare-earth exports and U.S. tech restrictions. While there is some optimism, uncertainties remain regarding final agreements.

In a significant development, representatives from the U.S. and China have announced that they have reached a consensus during high-level trade talks held in London. The discussions, which spanned two days, resulted in a preliminary framework aimed at implementing the Geneva trade consensus. This framework now requires approval from both President Donald Trump and President Xi Jinping before it can be put into action.

These latest talks come on the heels of a breakthrough trade agreement, established in mid-May, that imposed a temporary halt on new tariffs for a 90-day period. U.S. Commerce Secretary Howard Lutnick emphasized, “We have reached a framework to implement the Geneva consensus and the call between the two presidents,” during a briefing with reporters. This sentiment was similarly echoed by Li Chenggang, China’s vice minister of commerce.

Following a tense period of escalating tensions and accusations of treaty violations, Trump and Xi had a phone conversation last week that seemed to stabilize relations between the two economic giants. Notably, the two countries had previously agreed to a suspension of some tariffs and pledged to roll back specific trade measures during a meeting earlier in Switzerland.

As Lutnick announced the formation of the framework, he confirmed that he and U.S. Trade Representative Jamieson Greer would return to Washington, D.C., with the goal of securing Trump’s endorsement. He further added, if Xi also green-lights the agreement, the framework will proceed to implementation. Yet, some experts suggest that lingering disputes and unresolved details may still require further internal discussions. Jianwei Xu, a senior economist at Natixis, noted the importance of this commitment to de-escalation but cautioned about the uncertainty surrounding potential substantive breakthroughs.

Significantly, the issue of Chinese restrictions on rare-earth exports to the U.S. has been highlighted by Lutnick as a key aspect of this agreement. He expressed optimism that these restrictions would be addressed within the framework’s implementation. Additionally, he indicated that recent U.S. tech sales restrictions to China might also be rolled back as Beijing moves to approve rare-earth exports.

Interestingly, despite the official announcements regarding the trade discussions, Chinese state media had a muted response to Lutnick’s comments, only providing a lower-profile mention by Vice Commerce Minister Li, who remarked that the conversation contributed to strengthening bilateral trust. In London, U.S. Treasury Secretary Scott Bessent also indicated he was returning to the U.S. to testify before Congress, highlighting the ongoing domestic importance of these international talks.

On the ground, Chinese Vice Premier He Lifeng and Minister of Commerce Wang Wentao were instrumental in these discussions. Meanwhile, China’s CSI 300 index saw a slight uptick, while U.S. stock futures dipped as investors awaited more details about the proposed trade framework.

In summary, U.S. and Chinese officials have made progress towards a consensus on trade following high-level talks in London. With an agreed-upon framework poised for presidential approval, the next steps involve potential rollbacks on tariffs and key trade restrictions, hinging significantly on the interplay between both countries’ leaders. However, uncertainties and unresolved issues remain evident, signaling that the road ahead may still be complex.

Original Source: www.nbcsandiego.com

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