US and China ease trade war tensions by agreeing ‘framework' truce in London

The Guardian

a day ago

Update:
Date: 2025-06-11T06:23:08.000Z
Title: Introduction: US and China agree to framework deal to restore trade war truce
Content: Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
'Jaw, jaw is better than war, war,' as Harold Macmillan once remarked. And after two days of talking in London, the US and China have managed to patch up their trade conflict truce.
Just before midnight last night the two countries agreed a framework that, it is hoped, will ease tensions between the two economic superpowers. It will reinforce their initial agreement made in Geneva a month ago, once presidents Donald Trump and Xi Jinping have approved it.
Speaking at Lancaster House last night, US commerce scretary Howard Lutnick said the trade framework and implementation plan agreed with China in London should result in restrictions on rare earths and magents being resolved.
That had been a key demand for the US side, worried that American companies were being starved of vital supplies.
Lutnick told reporters the US negotiating team will take the framework back to Trump to get his approval, and then hope to implement it.
Lutnick says they had to get the 'negativity out' first when it comes to the US-China trade relationship. 'It's been President Trump's fundamental goal to reduce the trade deficit and increase trade. So this was the first step that the framework by which we will then approach…
China's vice commerce minister Li Chenggang described the talks as 'rational and candid', telling reporters:
'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.'
The talks, which began on Monday morning, took longer than expected – with the two sides sustained by deliveries from restaurant chain Ottolenghi, McDonald's, Burger King and KFC.
Food update at the trade talks at Lancaster House— the Chinese delegation is bringing in McDonald's, Burger King and KFC. pic.twitter.com/DYtX0OKVR7
Investors are now waiting for details of the agreement, and confirmation that it will satisfy Xi and Trump.
Traders are also anticipating the latest US inflation report, which may show that the trade war has driven up prices in the shops. Economists predict the US CPI index will have risen to 2.5%, from 2.3%.
While in London, chancellor Rachel Reeves will deliver the government's spending review, outlining day-to-day departmental spending for the next three years.
12pm BST: US weekly mortgage applications data
12.30pm BST: Chancellor Rachel Reeves to deliver UK spending review
1.30pm BST: US inflation report for May