US, China Agree in Principle on Trade Framework to Ease Tensions.

By Caroline Ameh

The United States and China have reached an agreement in principle on a framework aimed at de-escalating ongoing trade tensions between the world’s two largest economies, officials from both sides confirmed on Tuesday.

Following two days of high-level negotiations in London, US Commerce Secretary Howard Lutnick announced that the proposed framework includes measures to resolve disputes over restrictions on rare earth minerals and magnets — key components in modern technology.

“We have reached a framework to implement the Geneva consensus,” Lutnick told reporters. “Once the presidents approve it, we will then seek to implement it.”

The agreement will now be presented to US President Donald Trump and Chinese President Xi Jinping for final approval. It stems from a phone conversation between the two leaders on June 5, which both countries described as productive, and builds on a consensus reached during previous talks in Geneva last month.

China’s Vice Commerce Minister Li Chenggang echoed the US statement, saying, “The two sides have, in principle, reached a framework for implementing the consensus reached by the two heads of state during the phone call on June 5th and the consensus reached at the Geneva meeting.”

Trade in rare earth elements was a central focus of the London negotiations. These materials — essential for manufacturing smartphones, electric vehicles, and advanced electronics — have been a flashpoint in the broader trade conflict. Washington has accused Beijing of deliberately slowing exports of these minerals, while Beijing has pointed to US restrictions on advanced technologies as a violation of prior agreements.

Last month’s Geneva truce had temporarily eased the tariff war that began after President Trump imposed sweeping duties on a range of imports earlier this year, hitting China particularly hard. Beijing retaliated with its own steep tariffs, resulting in tit-for-tat hikes that peaked at 145%.

The Geneva agreement brought US tariffs on Chinese goods down to 30%, while China reduced its own levies on American imports to 10% and pledged to ease export barriers on rare earth materials. A 90-day window was established for the two nations to negotiate a more permanent solution.

However, both sides have since accused each other of failing to uphold their non-tariff commitments. US Trade Representative Jamieson Greer criticized China for not lifting restrictions on exports of rare earth magnets. In turn, Beijing accused Washington of breaching the truce by halting sales of chip design software, discouraging the use of Chinese-made chips from Huawei, and cancelling visas for Chinese students.

In a possible sign of goodwill ahead of the London talks, China’s Ministry of Commerce said over the weekend that it had approved some applications for rare earth export licences, though it did not specify the countries involved.

President Trump said on Friday that President Xi had agreed to restart trade in rare earth materials, a move likely to ease concerns among American manufacturers dependent on the supply chain.

The agreement, if ratified by both leaders, could signal a new phase in US-China economic relations, though significant hurdles remain in resolving deep-seated issues over trade practices, technology transfer, and market access.