U.S. and China Reach Agreement on Trade Framework in London Talks

U.S. and China Reach Agreement on Trade Framework in London Talks

The United States and China concluded two days of trade talks in London, resulting in a late-night announcement that both nations have “agreed in principle on a framework to implement the Geneva consensus.” This consensus, reached weeks ago, aims to foster cooperation on various trade issues, including the crucial area of rare earth minerals and magnets.

The dialogues occurred against a backdrop of high-stakes bilateral maneuvering between the two economic behemoths. Sadly, they fizzled out without setting any future meetings. U.S. Trade Representative Greer provided only a preview of what’s in the agreement. He added that while a framework is out there, the particulars have yet to be fleshed out in their entirety.

It was a great thing to have happened, Greer said — reiterating the importance of focusing on the future and staying positive long-term. Lutnick’s hope Lutnick is a firm believer that the trade talks will address some key issues. This probably indicates at least some interest on both sides to continue discussion.

“The topic of rare earth minerals and magnets… will be resolved in this framework.” – Lutnick

The Geneva consensus provided the basis for these negotiations. It did set an important baseline several weeks ahead of the negotiations starting. The newly announced framework appears to be a reiteration of those principles, rather than a significant advancement in resolving outstanding issues.

Lutnick went on to expand on the anticipated export restrictions concerning rare earth minerals. “When they approve the licenses, then you should expect that our export implementation will come down as well,” he stated. This comment points toward an eventual relaxing of restrictions depending on China’s behavior.

Even with all of the positive exchanges that took place in London, there is still some concern in terms of the impact of U.S. tariffs and licensing processes. The U.S. still upholds “warm” tariffs and “opaque” licensing procedures. Without clear deliverables from the discussions, it’s hard to know just what the new framework would mean in practice.

“Once the presidents approve it, we will then seek to implement it,” Lutnick noted, highlighting that actual implementation hinges on further approvals from both nations’ leadership. The U.S. will probably take a wait-and-see approach. This telecom decision is based on if and when China moves to unwind restrictions.

As the talks ended with an agreement to continue negotiating indefinitely, it’s uncertain what will come next in terms of action. Greer’s remark that “we can talk whenever” reflects an openness to dialogue but underscores the absence of a structured plan for future meetings or negotiations.

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