After two days of high-level negotiations in London, the United States and China have agreed on a sweeping deal. This agreement will establish a template for the Geneva trade consensus mentioned above. In mid-May, Canada and the United States reached an agreement to suspend most tariffs on each other’s products for 90 days. This new proposal comes in the wake of that settlement.
Those negotiations in Geneva had been directed toward resolving a number of trade irritants, including tariff and anti-export measures. The Geneva agreement faltered when China dragged its feet on lifting antidumping rules on rare earth export. At the same time, the U.S. intensified technology and student visa restrictions on Chinese nationals, further souring bilateral relations between the two countries.
Now, U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are leading those talks into London. Their aim had been to repair the frayed relationship between China and the U.S. A spokesperson for China’s Ministry of Commerce confirmed the agreement, stating it provides “an additional understanding of a framework to implement the Geneva agreement.”
In terms of ambition, China is going even bigger. They will, going forward, adjudicate and approve export applications for goods that fall under the ambit of export control regulations. At about the same time, the U.S. plans to lift a slew of punitive measures that have been placed on China.
Each country has charged the other with breaches of the Geneva trade agreement. This growing tension reflects greater complexities beneath the surface of their keen economic relationship.
Even U.S. President Donald Trump was singing the praises of this deal, calling it “the big deal we just signed with China yesterday.” This is indicative of the new administration’s prioritization of addressing disputes in trade and restoring economic partnerships.
As the negotiations in London get underway, it’s worth appreciating this historic step toward improving the dialogue between the two largest economies on the planet. Both parties are committed to seeing the new framework put into action. Their goals are paving the way for more consistent and predictable trade environments in the future.