U.S. and China Reach Framework Agreement to Renew Trade Talks

LONDON (AP) — Senior negotiators from the United States and China have successfully established a framework intended to revitalize their trade negotiations, following recent disputes that posed serious threats to the ongoing discussions. This significant development was announced after two days of talks in London, concluding late on Tuesday.

Focus on Disputed Exports

The focus of these discussions was primarily on resolving disputes surrounding mineral and technology exports, which have strained the fragile truce established during conversations in Geneva last month. However, it’s still uncertain whether any substantial progress was made on overarching issues, such as China’s significant trade surplus with the United States.

U.S. Commerce Secretary Howard Lutnick remarked to reporters, “First we had to get sort of the negativity out, and now we can go forward.”

Market Reactions

Following the agreement’s announcement, Asian stock markets experienced a notable uptick on Wednesday, indicating a positive investor response to the resumption of dialogue between the two economic powerhouses.

Background on the Talks

The recent talks followed a phone call between President Donald Trump and Chinese President Xi Jinping, aimed at stabilizing trade relations. According to the official Xinhua News Agency, both parties have reached a consensus on a framework for implementing the agreements discussed during their phone call and prior meetings in Geneva.

Leaders of the Chinese delegation included Li Chenggang, China’s Vice Minister of Commerce and International Trade Representative, and Commerce Minister Wang Wentao, who met with U.S. negotiators including Lutnick, Treasury Secretary Scott Bessent, and Trade Representative Jamieson Greer at Lancaster House, a historic venue near Buckingham Palace.

The Urgency of Resolving Issues

Wendy Cutler, a former U.S. trade negotiator, emphasized the rapid passage of time, stating that the two countries have lost about 30 of the 90 days allotted to resolve their trade disputes. This urgent timeline stems from an agreed-upon 90-day suspension of the aggressive tariffs—exceeding 100%—that both sides had previously imposed, thereby avoiding an escalating trade war that could push the global economy towards recession.

Cutler remarked, “The U.S. and China lost valuable time in restoring their Geneva agreements. Now, only sixty days remain to address issues of concern, including unfair trade practices and transshipment.”

Ongoing Tensions

Since the Geneva discussions, tensions have resurfaced, with the U.S. and China exchanging criticisms over vital topics such as advanced semiconductor technology, student visas, and rare earth minerals—key components for a variety of industries.

China, given its status as the world’s leading producer of rare earths, has indicated a willingness to expedite the issuance of export licenses. Conversely, China is hopeful that the U.S. will retract its restrictions on access to technologies involved in advanced semiconductor manufacturing.

Future Steps

Lutnick has indicated that addressing the rare earths issue is a critical aspect of the newly agreed-upon framework, hinting that the U.S. is willing to lift certain measures in response to China’s licensing modifications, although specific details remain undisclosed.

Wendy Cutler noted the unprecedented nature of the U.S. potentially negotiating its export controls, which could open avenues for China to insist on similar discussions in future negotiations.

Continued Tariffs and Policy Implications

In a related development, a federal appeals court in Washington approved the government’s continued collection of tariffs imposed by Trump, not only on China but on a range of countries worldwide, as the administration pursues appeals against a ruling undermining its signature trade policy.

President Trump has expressed a strong desire to “open up China” to U.S. products, emphasizing the importance of fostering access to the dominant manufacturing economy.

“If we don’t open up China, maybe we won’t do anything,” Trump stated at the White House. “But we want to open up China.”