Washington (TDI): United States and China announced Tuesday that they had agreed in principle on a new framework aimed at putting their trade truce back on track and addressing Beijing’s restrictions on rare earth exports.
However, the agreement offered little indication of progress on resolving deeper, long-standing economic tensions between the two countries.
After two days of negotiations in London, US Commerce Secretary Howard Lutnick said the new framework builds on a previous understanding reached in Geneva, which sought to de-escalate a tariff war that had seen duties soar to punishing levels on both sides.
“This framework gives substance to what was agreed upon last month,” Lutnick said during a late-night press briefing, according to Reuters.
“Now we’ll take it back to President Trump for his review, and the Chinese delegation will do the same with President Xi. If both leaders give the green light, we can begin putting this into action.”
Read More: Trade Truce: China, US Slash Massive Tariffs
The Geneva deal had stumbled in recent weeks, primarily due to China’s ongoing export restrictions on key minerals used in technology and defense.
In response, Washington imposed its own export controls targeting sensitive US technologies, including semiconductor design tools and aircraft components.
According to Lutnick, the London agreement includes provisions to roll back some of the American restrictions, though he did not go into detail. Talks wrapped up just past midnight local time.
China’s Vice Commerce Minister Li Chenggang confirmed that both sides had reached a tentative understanding and would now seek approval from their respective leaders.
Read More: US, China Agree to Slash Tariffs by 115% for 90 Days
Despite this step forward, analysts warned that the deal remains fragile. Major sticking points such as US objections to China’s state-controlled economic practices and Trump-era tariffs remain unresolved.
The two sides now face a tight deadline. Without a broader agreement by August 10, tariffs could return to previous levels, rising from 30% to 145% for US goods and from 10% to 125% for Chinese exports.
Farkhund Yousafzai is an Associate Editor at The Diplomatic Insight.
