US and China reach tentative framework deal to revive trade truce

US and Chinese officials have reached a tentative framework agreement to revive stalled trade negotiations, aiming to reinstate the Geneva consensus and lift some mutual export restrictions, including China’s curbs on rare earth mineral exports.

However, the deal offers limited signs of a lasting resolution to the broader and long-standing trade tensions between the two economic superpowers.

The announcement came after two days of intensive negotiations in London, with US Commerce Secretary Howard Lutnick stating the framework “puts meat on the bones” of the preliminary accord brokered in Geneva last month, which sought to reduce punitive bilateral tariffs that had escalated to triple-digit levels.

The Geneva meeting ended with both sides interpreting the agreement differently, necessitating renewed dialogue on enforcement and implementation.

Josh Lipsky, Senior Director at the Atlantic Council’s GeoEconomics Center, emphasized that the framework reestablishes a negotiating track.

The parties now face an August 10 deadline to finalize a more comprehensive agreement. Failing that, suspended tariffs could return in full, with US rates surging from 30% to 145%, and Chinese rates from 10% to 125%.

According to Lutnick, the new framework includes the removal of Chinese export restrictions on rare earths and magnets, alongside a partial rollback of recent US export controls, though he did not provide specifics.

In a parallel statement, China’s Vice Commerce Minister Li Chenggang confirmed that an agreement in principle had been reached and would be submitted to national leaders for review.

However, trade policy uncertainty, compounded by President Trump’s volatile tariff regime, has disrupted global markets, caused congestion at major ports, and cost businesses billions in lost sales and operational costs.

Reflecting broader concerns, the World Bank cut its 2025 global growth forecast to 2.3%, citing rising tariffs and policy unpredictability as major headwinds.

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