US, China agree on ‘framework' on trade after talks in London
The United States and China have agreed on a 'framework' on trade after two days of talks in London aimed at deescalating tensions between the sides.
While the specifics of the framework announced on Tuesday were unclear, the apparent breakthrough comes a month after Washington and Beijing announced a 90-day pause on most of their tariffs following talks in Geneva.
US Commerce Secretary Howard Lutnick said the sides would work to implement the 'Geneva consensus' and had 'pounded through' all the issues dividing the world's two largest economies.
Lutnick said the sides would move forward with the framework pending its approval by US President Donald Trump and Chinese President Xi Jinping, who held a 90-minute phone call on trade last week.
'Once the presidents approve it, we will then seek to implement it,' Lutnick told reporters outside Lancaster House.
Lutnick indicated that US measures imposed in response to a slowdown in Chinese exports of rare earths, a key issue dividing the sides, would likely be eased once supplies of the critical minerals ticked up.
Chinese Vice Commerce Minister Li Chenggang called the talks 'professional, rational, in-depth and candid'.
'The two sides will bring back and report to our respective leaders the talks in the meeting as well as the framework that was reached in principle,' Li told reporters.
'We hope that the progress we made in this London meeting is conducive to increasing trust between China and the United States.'
Asian stock markets rose on hopes of a de-escalation in the trade tensions, which have cast a shadow over the global economy.
The World Bank on Tuesday lowered its forecast for global growth from 2.7 percent to 2.3 percent, pointing to the ongoing uncertainty around trade.
Japan's Nikkei 225 was up almost 0.5 percent as of 03:30 GMT, while the Hang Seng in Hong Kong and CSI 300 in mainland China were about 1 percent and 0.8 higher, respectively.
'I would say that meeting a 90-day deadline for complex discussions was always going to be challenging,' Deborah Elms, the head of trade policy at the Hinrich Foundation in Singapore, told Al Jazeera.
'After two rounds of apparently intense discussions, both sides seem to have reaffirmed their interest in avoiding new escalation and have started to flesh out the path forward. Despite the optimistic language from some out of the White House, these talks are not going to be easy.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Al Jazeera
4 hours ago
- Al Jazeera
Why China's rare earth exports are a key issue in trade tensions with US
China's export of rare earth elements is central to the trade deal struck this week with the United States. Beijing has a virtual monopoly on the supply of the critical minerals, which are used to make everything from cars to drones and wind turbines. Earlier this year, Beijing leveraged its dominance of the sector to hit back at US President Donald Trump's sweeping tariffs, placing export controls on seven rare earths and related products. The restrictions created a headache for global manufacturers, particularly automakers, who rely on the materials. After talks in Geneva in May, the US and China announced a 90-day pause on their escalating tit-for-tat tariffs, during which time US levies would be reduced from 145 percent to 30 percent and Chinese duties from 125 percent to 10 percent. The truce had appeared to be in jeopardy in recent weeks after Washington accused Beijing of not moving fast enough to ease its restrictions on rare earths exports. After two days of marathon talks in London, the two sides on Wednesday announced a 'framework' to get trade back on track. Trump said the deal would see rare earth minerals 'supplied, up front,' though many details of the agreement are still unclear. Rare earths are a group of 17 elements that are essential to numerous manufacturing industries. The auto industry has become particularly reliant on rare-earth magnets for steering systems, engines, brakes and many other parts. China has long dominated the mining and processing of rare earth minerals, as well as the production of related components like rare earth magnets. It mines about 70 percent of the world's rare earths and processes approximately 90 percent of the supply. China also maintains near-total control over the supply of heavy rare earths, including dysprosium and terbium. China's hold over the industry had been a concern for the US and other countries for some time, but their alarm grew after Beijing imposed export controls in April. The restrictions affected supplies of samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, and required companies shipping materials and finished products overseas to obtain export licences. The restrictions followed a similar move by China in February, when it placed export controls on tungsten, bismuth and three other 'niche metals'. While news of a deal on rare earths signals a potential reprieve for manufacturers, the details of its implementation remain largely unclear. Chinese customs data shows the sale of rare earths to the US dropped 37 percent in April, while the sale of rare earth magnets fell 58 percent for the US and 51 percent worldwide, according to Bloomberg. Global rare earth exports recovered 23 percent in May, following talks between US and Chinese officials in Geneva, but they are still down overall from a year earlier. The greatest alarm has been felt by carmakers and auto parts manufacturers in the US and Europe, who reported bottlenecks after working their way through inventories of rare earth magnets. 'The automobile industry is now using words like panic. This isn't something that the auto industry is just talking about and trying to make a big stir. This is serious right now, and they're talking about shutting down production lines,' Mark Smith, a mining and mineral processing expert and the CEO of the US-based NioCorp Developments, told Al Jazeera. Even with news of a breakthrough, Western companies are still worried about their future access to rare earths and magnets and how their dependence on China's supply chain could be leveraged against them. The Financial Times reported on Thursday that China's Ministry of Commerce has been demanding 'sensitive business information to secure rare earths and magnets' from Western companies in China, including production details and customer lists. Trump shared some details of the agreement on his social media platform, Truth Social, where he also addressed concerns about rare earths and rare earth magnets. 'We are getting a total of 55% tariffs, China is getting 10%. The relationship is excellent,' Trump said, using a figure for US duties that includes levies introduced during his first term. '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),' Trump said. Ahead of the negotiations in London, China's Ministry of Commerce had said it approved an unspecified number of export licences for rare earths, and it was willing to 'further strengthen communication and dialogue on export controls with relevant countries'. However, an op-ed published by state news outlet Xinhua this week said rare earth export controls were not 'short-term bargaining tools' or 'tactical countermeasures' but a necessary measure because rare earths can be used for both civilian and military purposes. NioCorp Developments' Smith said Beijing is unlikely to quickly give up such powerful leverage over the US entirely. 'There's going to be a whole bunch of words, but I really think China is going to hold the US hostage on this issue, because why not?' he said. 'They've worked really hard to get into the position that they're in. They have 100 percent control over the heavy rare earth production in the world. Why not use that?' Deborah Elms, the head of trade policy at the Hinrich Foundation in Singapore, said it was hard to predict how rare earths would be treated in negotiations, which would need to balance other US concerns like China's role in exporting the deadly opioid fentanyl to the US. Beijing, for its part, will want guarantees that it can access advanced critical US technology to make advanced semiconductors, she said.
Welcome Qatar
6 hours ago
- Welcome Qatar
US-Iran Tension Rising? Donald Trump To Pull Personnel From Middle East, Calls It 'Dangerous Place'
US-Iran Tension Rising? Donald Trump To Pull Personnel From Middle East, Calls It 'Dangerous Place' SHARE
Al Jazeera
8 hours ago
- Al Jazeera
Japan protests to China after ‘dangerous' moves by warplanes over Pacific
Japan has protested to Beijing over what was described as Chinese fighter jets' 'near-miss' manoeuvres near Japanese maritime patrol planes over the Pacific where China's two operational aircraft carriers were spotted deployed simultaneously for the first time last weekend. Japan's Kyodo news agency reported on Thursday that a Chinese J-15 warplane from the Shandong aircraft carrier flew within 45 metres (147 feet) of a Japanese P-3C maritime surveillance plane and made other 'dangerous manoeuvres' during incidents on Saturday and Sunday. 'We have expressed serious concern to the Chinese side and solemnly requested prevention of recurrence,' Japan's Chief Cabinet Secretary Yoshimasa Hayashi said. According to Japan's defence ministry, P-3C aircraft, belonging to Japan's Maritime Self-Defense Force based on the island of Okinawa, were conducting surveillance over international waters in the Pacific when they encountered Chinese warplanes. On Saturday, a J-15 from the Shandong chased a Japanese P-3C patrol aircraft for about 40 minutes. Then, on Sunday, a J-15 fighter chased a P-3C for 80 minutes, crossing in front of the Japanese aircraft at a distance of only 900 metres (2,952 feet), the ministry said. 'Such abnormal approaches by Chinese military aircraft could potentially cause accidental collisions,' the defence ministry said in a statement on Wednesday, attaching close-up images of the J-15 jet it took on Sunday. There was no damage to the Japanese planes or harm caused to the aircraft crew, the ministry added. Hayashi, the top Japanese government spokesperson, said Tokyo will maintain communications with Beijing at various levels and will also ensure the monitoring of airspace around Japan's territories continues. The last time a similar incident was reported was more than a decade ago in May and June 2014, when Chinese Su-27 fighter jets flew within 30 metres (98 feet) of Japan's military planes. The Kyodo news agency also reported that the Shandong aircraft carrier conducted takeoff and landing drills on Monday to the north of Japan's southernmost Okinotori Island, inside the country's exclusive economic zone (EEZ). The Liaoning carrier was also spotted inside the EEZ on Saturday before moving outside the zone where it also conducted takeoffs and landings on Sunday.
