The world’s two largest economies have agreed “in principle” on a plan to ease trade tensions. The focus: rare earths, export controls, and a possible path forward — if both presidents sign off.
Agreement Reached — But Not Final Yet
After two days of high-stakes trade talks in London, the US and China announced a tentative framework to cool tensions.
US Commerce Secretary Howard Lutnick confirmed that the deal now goes to Donald Trump and Xi Jinping for approval.
“We have reached a framework to implement the Geneva consensus,” Lutnick said. “Once the presidents approve it, we’ll move to implement it.”
Rare Earth Breakthrough
At the heart of the deal is an agreement to resolve restrictions on rare earth minerals and magnets — materials China dominates, and which are essential for US tech and defense industries.
The US had accused Beijing of slowing exports. China says the US retaliated with tech bans.
China has now approved some export licenses for rare earths. In return, the US is expected to roll back related restrictions.
Tech Tensions Remain
While both sides agreed to “balanced” easing of some trade controls, restrictions on advanced semiconductors and AI-related tech (like Nvidia chips and chip design software) will likely stay in place for now.
China has criticized the US for blocking Huawei and canceling student visas, calling it a violation of the earlier Geneva truce.
Context: The Tariff War
In May, both countries agreed to a temporary pause in their escalating tariff war.
- US tariffs dropped from 145% to 30%
- China cut its levies to 10%
- A 90-day window was set to reach a broader deal
But since then, both sides accused the other of breaking promises — prompting the London meetings.
Talks Will Continue
Despite the progress, negotiations aren’t done.
- Talks may continue into Wednesday if needed, according to Secretary Lutnick
- Treasury Secretary Bessent said he’s returning to DC to testify before Congress, but Greer and Lutnick will stay to finalize the details
The US and China have taken a meaningful step toward resolving trade tensions, especially around rare earths. But the deal isn’t done, and the hardest part — tech, chips, and AI — is still ahead.
Today’s talks could be key.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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