Top officials from the United States and China have concluded high-level trade talks in London, emerging with an agreement in principle aimed at reducing ongoing tensions between the two economic giants. US Commerce Secretary Howard Lutnick announced that the proposed framework includes measures to resolve issues surrounding rare earth minerals and magnets, which are vital for contemporary technological industries.
Following two days of negotiations, both parties expressed a commitment to conveying the agreed-upon plan to their respective leaders—President Donald Trump and President Xi Jinping. The discussions underscored the critical nature of Chinese exports of rare earth minerals, which are indispensable for producing devices ranging from smartphones to electric vehicles.
Last month, both nations had momentarily paused hostilities, agreeing on a truce regarding trade tariffs, but have accused each other of violating the terms since. The United States has highlighted China's sluggishness in releasing exports of rare earth metals and magnets, while China has responded with accusations of the US limiting access to essential goods such as semiconductors and AI-related technologies.
"We have reached a framework to implement the Geneva consensus," Lutnick explained to journalists after the meetings. He emphasized that the next steps hinge on the approval of both presidents. This diplomatic effort follows a recent phone conversation between Trump and Xi, which Trump described positively, indicating progress towards cooperation.
The talks were particularly significant given the backdrop of escalating tariffs initiated by Trump earlier this year, disproportionately impacting Chinese imports. China's retaliatory tariffs prompted a sharp rise, peaking at 145%. However, negotiations in Switzerland in May led to a temporary reduction in tariffs on both sides, fostering hopes for a lasting resolution with a 90-day deadline to finalize a trade agreement.
Despite their efforts, both nations have reported breaches of previous non-tariff commitments. US Trade Representative Jamieson Greer accused China of not rolling back restrictions on rare earth exports, while Chinese officials cited violations by the US regarding sales of critical technology and restrictions affecting Chinese firms.
In an indication of progress, the Chinese Ministry of Commerce announced prior to the talks that it had granted some licenses for rare earth exports, although specifics remain undisclosed. Trump also mentioned that Xi has agreed to restart trade involving rare earth materials, paving the way for forthcoming negotiations.
