Trump hails limited trade agreement with China after talks in London

Boston Globe

a day ago

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Less than two weeks after accusing China of violating a trade-war truce, Trump on Wednesday had nothing but praise for the Chinese leader.
'President Xi and I are going to work closely together to open up China to American Trade. This would be a great WIN for both countries!!!' the president wrote in a second Truth Social post.
Under the renewed truce, the United States will impose a 55 percent tariff on Chinese goods, and China will hit American products with a 10 percent import tax, the president said. Those are both higher rates than before Trump took office, but lower than the triple-digit tariff levels that each nation imposed this spring.
US and Chinese negotiators agreed late Tuesday to try again to implement the trade-war truce that collapsed amid recriminations on both sides just weeks after it was reached during an earlier round of talks in Geneva.
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Speaking near midnight in London, Commerce Secretary Howard Lutnick announced what he called a 'handshake' deal to put into effect the terms of the May 12 US-China agreement that called for both nations to lower their tariffs and take additional steps to facilitate trade.
'We have reached a framework to implement the Geneva consensus and the call between the two presidents,' Lutnick told reporters, referring to a June 5 telephone conversation between Trump and Xi. 'I think it's really beneficial to the United States of America. It's very beneficial to the Chinese and the China economy.'
Negotiators released no text of either the London framework or the earlier Geneva accord to de-escalate the US-China trade war. But Lutnick said both nations would remove new trade barriers they had erected as the truce broke down.
That means China is expected to permit an increased flow of critical materials known as 'rare earths' for auto and defense production. As those shipments increase, the United States will lift measures that it imposed recently 'in a balanced way,' Lutnick said.
'We do absolutely expect that the topic of rare-earth minerals and magnets, with respect to the United States of America, will be resolved in this framework implementation,' Lutnick said.
He did not specify which US measures would be lifted in response. But his department has implemented a number of restrictions on exports to China of aerospace technology and advanced semiconductor equipment, which Chinese officials urgently want removed.
Lutnick described the diplomatic breakthrough as the first step toward expanding US-China trade, which topped $580 billion last year. The United States buys more than three times as much from China as Chinese customers buy from Americans, a trade deficit that the president has inveighed against for years as a measure of industrial decline.
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'We have an existing, significant trade deficit, and President Trump's fundamental goal is to reduce the trade deficit and increase trade. So this was the first step of the framework by which we will then approach and discuss growing trade
.
But first we had to sort of get the negativity out," Lutnick said.
Briefing reporters outside Lancaster House, the 19th-century mansion in London's West End that hosted two days of talks, Lutnick credited the involvement of both presidents with producing quick results.
'You have to get things done if you're working for President Trump. I'm sure they felt they had to get it done because they were working for President Xi,' he said.
The US delegation also included Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer. Bessent left the talks a few hours early to return to Washington in time to appear before Congress on Wednesday.
The Chinese team was led by Vice Premier He Lifeng, a close associate of Xi.
In China, Li Chenggang, China's vice commerce minister, said the talks were 'professional, rational, in-depth and candid,' according to Chinese state media, and Beijing hopes the discussions will 'be conducive to increasing trust between China and the United States.'
Yao Yang, an economist at Peking University, said the fact that Beijing and Washington engaged in negotiations amid bitter trade tensions is positive.
'The Chinese government's stance has always been, if you want to fight, we are going to take it. But the purpose of fighting is not just for the sake of fighting, it is to prepare for negotiation or to bring the other side to the negotiation table,' he said.
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Yet even as the latest attempt to put US-China relations on a sound footing moved forward, Greer nodded to the long list of issues that divide the two sides. The Trump administration has complained about Chinese policies that fuel what it sees as excess production of manufactured goods, which depress global prices and hurt American factory workers.
'There are some things that the Chinese and US economies, they just don't fit together very well. Other things, maybe they do. And there'll be a time for broader conversations on that,' he said.
The 90-day pause on triple-digit tariffs that amounted to a de facto US-China trade embargo expires Aug. 12. In response to a question about prospects for an extension, Greer said that would be up to the president.
Further talks are expected, though no date has been agreed to yet.
The Trump administration notched a legal win Tuesday when a federal appeals court ruled that many of the tariffs the president imposed on China can remain while the government appeals a lower-court ruling that found they were illegal.
The Court of International Trade, a little-known specialized court in New York, ruled last month that Trump exceeded his authority by invoking emergency powers to impose tariffs on imports from China and other nations.
The Trump administration quickly appealed and the appeals court temporarily paused the lower court's decision. On Tuesday, it said that pause could stay in place while the appeal was decided.
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'The court also concludes that these cases present issues of exceptional importance warranting expedited en banc consideration of the merits in the first instance,' the US Court of Appeals for the Federal Circuit said Tuesday. The appeals court said it would expedite the issue and hear arguments July 31.