ISLAMABAD: The United States and China announced a new trade framework on Tuesday aimed at restoring their tariff truce and easing export restrictions.
This agreement marks a crucial step in cooling down the ongoing trade tensions between the two economic giants.
After intense negotiations in London, US Commerce Secretary Howard Lutnick described the deal as adding “meat on the bones” to last month’s Geneva agreement, which sought to reduce retaliatory tariffs.
Trade Talks and Export Restrictions
The Geneva agreement had faced setbacks due to China’s ongoing export curbs on rare earth minerals, essential for many high-tech industries.
In response, the US had imposed export controls on semiconductor software, aircraft components, and other goods destined for China.
Under the new framework, some US export restrictions are set to be lifted, although details remain limited until both President Trump and Chinese President Xi Jinping approve the deal.
Chinese Vice Commerce Minister Li Chenggang confirmed that the framework had been agreed upon in principle and would be reviewed by leaders of both nations.
Market Reactions and Economic Impact
Investors reacted cautiously to the announcement, with Asia-Pacific shares seeing a modest increase amid hopes for reduced trade frictions.
However, experts warn that the details of rare earths export and chip production will be crucial to sustaining progress.
The two sides face a deadline of August 10 to reach a comprehensive deal; otherwise, tariffs could escalate dramatically, reversing recent gains.
The ongoing trade war has weighed heavily on global growth forecasts and disrupted supply chains worldwide.
The talks were given momentum by a recent phone call between Presidents Trump and Xi, which helped align their directives with the Geneva truce.
Resolving restrictions on rare earth minerals, where China holds a near-monopoly, is a key element of the framework.
As the world awaits further developments, both countries continue to seek a balanced solution to safeguard their economic interests.
