US, China Agree on Path for Trade Truce

The U.S. and China have agreed on a framework to implement the trade truce they struck in Geneva last month that would have seen both sides bring down sky-high tariffs, following two days of talks in London.

The framework, which seeks to defuse a trade war that has been escalating between the trading partners, raises the prospect of a resumption in U.S. access to Chinese rare-earth minerals. The deal was announced by representatives from both countries and still needs the approval of U.S. President Donald Trump and China’s President Xi Jinping, according to reports.

“The two largest economies in the world have reached a handshake for a framework,” U.S. Commerce Secretary Howard Lutnick said, according to The Wall Street Journal. “We’re going to start to implement that framework upon the approval of President Trump, and the Chinese will get their President Xi’s approval, and that’s the process.”

In a truce struck on May 12, the two sides had agreed to dramatically roll back tariffs on each other’s imports for an initial 90-day period.  The U.S. wants to restore access to Chinese rare-earth minerals used to make batteries and advanced electronics, while Beijing is reportedly seeking a lifting of Washington’s restrictions on exporting jet engine parts, computer chip design software, and other high-tech items to China.

Lutnick didn’t disclose details but noted that Beijing’s restrictions on rare earth exports would “absolutely” be resolved within the new framework.