Top officials from the United States and China, including US Commerce Secretary Howard Lutnick, have recently wrapped up discussions in London aimed at reducing ongoing trade disputes between the two economic giants. They came away with an agreement in principle to create a framework designed to manage issues surrounding rare earth minerals and magnets, crucial components for advanced technology like smartphones and electric vehicles.
Now, the plan will be taken to President Donald Trump and President Xi Jinping for their approval. These dialogues followed a previous phone call between the two leaders last week, which Trump termed a "very good talk." The framework reportedly reflects a consensus reached earlier during their conversation and a prior Geneva meeting.
While a temporary truce was established last month over trade tariffs, various accusations have arisen about each side violating the agreement. The US contends that China has been sluggish in exporting essential rare earth materials, while Beijing claims the US has restricted access to critical technologies like semiconductors.
A new wave of negotiations comes in the context of previous tariffs implemented by Trump, which impacted Chinese imports significantly, leading to a series of retaliatory measures from China. This back-and-forth increased tariffs substantially, hitting a peak of 145%.
As both countries continue discussions to refine their trade relationship, it remains to be seen how quickly the leaders will act on the proposed framework, paving the way for a more stable trade environment in the coming months.
