The US and China have announced a fresh trade framework following intensive negotiations in the United Kingdom, marking another attempt to resolve escalating economic tensions between the world's two largest economies, CNN reported.
The development represents yet another diplomatic effort to establish stable commercial relations between the superpowers after months of deteriorating ties.
Chinese and American trade officials confirmed Tuesday evening they had reached consensus on implementing arrangements initially established during May discussions in Geneva, CNN reported. The framework now awaits final approval from both President Donald Trump and Chinese President Xi Jinping.
Trump announced on Truth Social: "Our deal with China is done, subject to final approval with President Xi and me. Full magnets, and any necessary rare earths, will be supplied, up front, by China. Likewise, we will provide to China what was agreed to, including Chinese students using our colleges and universities (which has always been good with me!). We are getting a total of 55% tariffs, China is getting 10%. Relationship is excellent! Thank you for your attention to this matter!"
CNN reported that businesses, consumers and financial markets anxious about mounting trade barriers should experience relief from burdensome tariffs that have created significant economic uncertainty. Easing commercial restrictions between the dominant global economies should reduce costs and inject much-needed stability into markets showing troubling strain indicators.
However, the framework primarily restores conditions that existed before Trump's April 2 "Liberation Day" declarations rather than establishing genuinely improved trade relations. Tariff levels from both countries continue at historically elevated rates, while substantial export limitations persist across multiple sectors. The US maintains comprehensive restrictions on high-end artificial intelligence chip sales to China, while Chinese automotive imports remain completely blocked from American markets. Despite the latest agreement, China has not significantly increased what Trump characterizes as "fair" treatment of American commercial interests compared to pre-crisis levels.
Essential commercial negotiations
Trade negotiations became absolutely essential after April tensions reached critical levels threatening permanent economic damage. Trump's "Liberation Day" announcements triggered a punishing 145% tariff on most Chinese imports, making purchases from America's second-largest trading partner mathematically impossible for US companies across virtually every industry sector.
Treasury Secretary Scott Bessent, who led American negotiations in both rounds of discussions with Chinese counterparts, characterized previous tariff levels as "unsustainable."
May 12 announcements from both delegations promised significant rollbacks of the historically high mutual tariffs that had strangled bilateral commerce. Economic forecasters immediately reduced recession predictions while consumer confidence showed signs of recovery from earlier lows that had persisted throughout the spring trade crisis.
Recent weeks saw renewed hostility from the Trump administration toward China, with senior officials accusing Beijing of systematically violating May commitments regarding market access and export restrictions. Chinese officials similarly claimed Washington failed to honor Geneva agreement obligations regarding technology transfer restrictions and financial sanctions relief.
The Trump administration anticipated China would eliminate comprehensive restrictions on rare earth materials essential for electronics manufacturing, defense systems, and renewable energy infrastructure, but Beijing has only gradually permitted these materials to return to open markets. This slow pace created significant frustration within the Trump administration and prompted new US export restrictions on Chinese-bound goods, three administration officials told CNN last month.
China maintains virtual monopoly control over rare earth elements required for manufacturing cars, jet engines, MRI contrast dye and certain cancer medications used in American hospitals and medical facilities. Trump informed reporters Friday that Xi Jinping had committed to resuming rare earth mineral exports at previous levels, though industry analysts indicated these crucial materials had not resumed flowing to the US at historical volumes.
Successful implementation of current agreement terms should prevent the most severe trade war consequences, including potential pandemic-level supply shortages that experts had warned could affect essential goods ranging from medical devices to consumer electronics.
