Trade War Truce Is This the Beginning of the End?

U.S. and China Agree to Resume Trade Truce After Tensions Escalated

After a period of heightened economic tensions, the United States and China have reached an agreement to reinstate a trade truce initially established in May. This positive development, confirmed by officials from both nations on Tuesday, signals a potential de-escalation in the ongoing trade conflict.

Following two days of intensive negotiations held in London, high-ranking economic representatives from both countries are preparing to submit the newly forged "framework agreement" to their respective leaders – President Trump and China’s Xi Jinping – for final ratification. This agreement aims to restore the bilateral relationship to the terms previously negotiated in Switzerland last month, a deal that had faltered in recent weeks.

The breakdown of the initial agreement stemmed primarily from China's continued restrictions on the export of crucial rare earth minerals and magnets, essential components for numerous U.S. manufacturers. This move triggered retaliatory measures from the United States, further exacerbating trade tensions.

While the complete specifics of the renewed agreement are yet to be disclosed, key takeaways from the London talks include:

• Resolution of Rare Earth Mineral Concerns: Commerce Secretary Howard Lutnick, a member of the U.S. negotiating team, assured reporters that American concerns regarding China's restrictions on mineral and magnet exports have been addressed.
• Balanced Reversal of Measures: Secretary Lutnick also indicated that the measures implemented by the United States in response to China's export restrictions would be reversed "in a balanced way," suggesting a reciprocal approach to easing trade barriers.
• Focus on a Mutually Beneficial Outcome: The agreement underscores a commitment from both sides to find common ground and foster a more stable and predictable trade environment.

The success of this agreement hinges on its final approval by President Trump and President Xi Jinping. If ratified, it could provide a significant boost to both the U.S. and Chinese economies by reducing uncertainty and fostering greater trade cooperation.

Key Highlights:

• Framework Agreement: A new framework agreement has been reached after marathon negotiations in London.
• Leadership Approval: The agreement awaits final approval from President Trump and President Xi Jinping.
• Rare Earth Minerals: The central point of contention – restrictions on rare earth mineral exports – has reportedly been resolved.

This renewed trade truce represents a potentially significant step towards stabilizing U.S.-China relations and mitigating the negative impacts of trade disputes on the global economy. The coming days will be crucial as the agreement undergoes final review and implementation. A collaborative path forward is crucial, not only for the economic well-being of both nations but also for the stability of the global marketplace.

Tags: US China trade, Trade truce, US China relations, Economic agreement, Trump Xi, Rare earth minerals, Trade negotiations, London talks, US economy, China economy

Source: https://www.nytimes.com/2025/06/10/business/economy/us-china-trade-deal.html