U.S. and China Agree to Get Trade Detente Back on Track

By Max Colchester , Caitlin McCabe and Lingling Wei

LONDON—U.S. and Chinese negotiators wrapped up two days of intense talks here with what they said was a frame--work to get their trade detente back on track and ratchet down tensions between the two big-gest economies.

Representatives from the countries said the framework would essentially restore a pact they agreed to in Switzerland last month, a deal that saw both sides lower tariffs and was premised in part on Beijing’s promise to speed critical mineral-export licenses while the negotiators kept talking.

“The two largest economies in the world have reached a handshake for a framework,” Commerce Secretary Howard Lutnick said. “We’re going to start to implement that framework upon the approval of President Trump, and the Chinese will get their President Xi’s approval, and that’s the process.”

A senior Chinese negotiator, Li Chenggang, nodded to Lutnick’s remarks, saying the two sides “agreed in principle.”

The framework marked the latest twist in a winding trade war—one that had been ratcheting up in recent weeks following the earlier detente.

A key goal for the U.S. negotiators, led by Treasury Secretary Scott Bessent and Lutnick, was to get China to speed up exports of rare-earth minerals and magnets containing them as their Chinese counterparts had agreed to in Geneva last month.

The Chinese team, led by Vice Premier He Lifeng, a trusted aide to leader Xi Jinping, drove a hard bargain by asking the U.S. side to loosen restrictions significantly on the sale of technology and other products to China, according to people familiar with the matter.

The negotiators didn’t dis-

close exactly what they had agreed to as part of the framework, which could lead to continued uncertainty over the trade truce. The lack of announced details might suggest the U.S. side will need Trump’s approval to undo some of the controls Beijing’s representatives asked for.

Following a phone call with Xi last week that paved the way for the London talks, Trump had said, “There should no longer be any questions respecting the complexity of rare-earth products.” Lutnick echoed that sentiment when talking to reporters in London.

“You should expect those to come off, sort of, as President Trump said, in a balanced way, when they approve” the rareearth licenses, Lutnick said. “Then you should expect that our export implementation will come down,” he said.

Last month, Washington and Beijing agreed to reduce sky-high tariffs on imports in a de-escalation of trade hostilities. Both sides had since ac-cused each other of violating the spirit of that agreement by using nontariff means to throttle exports.

The U.S. accused China of slow-walking export licenses for rare earths and magnets, critical components needed by U.S. companies for advanced machinery such as cars, semiconductors and military aircraft.

China bristled at new U.S. restrictions on exports to China of American technology including jet engines and chip-design software, as well as the Trump administration’s plan to revoke the visas of Chinese students studying at American colleges.

A recent commentary by the official Xinhua News Agency criticized the U.S. for allegedly viewing economic issues through the lens of security, saying: “This thinking will become the biggest obstacle” to cooperation between the two countries. Yet it left the door open for relations to improve, saying strengthening economic ties will benefit both nations.

Guo Shan, a Shanghai-based partner at advisory firm Hutong Research, said the framework agreement is likely the first step of many toward reaching a broader deal and doesn’t expect export controls to be fully resolved.

“Both sides would want deterrence to prevent the other side from violating the truce,” she said, adding that there is “little political trust in each other.”

Christopher Wood, global head of equity strategy research at Jefferies in Hong Kong, said the London meeting “looks like damage control, but it looks like they’ve got things back on track.” Still, he said, “what’s become clear in the last few weeks is that this rare earths issue has got real leverage for Beijing.” After raising tariffs on China to above 100%, Trump agreed to lower them again as exporters and consumers felt the pain.

Now, with a shortage of rare earths threatening automakers’ ability to keep production lines running, the U.S. has had to come back to the table— with China making clear that it was Washington asking for the talks.

“If you had a test case for how not to approach China, this is it,” Wood said.