US-China trade framework awaits Trump and Xi approval: rare earths deal poised to shift markets

After intense London talks, the US and China have crafted a trade framework to ease rare earth mineral export restrictions, pending approval from their presidents. This deal could reshape supply chains critical to US auto and defense sectors, though experts remain cautious about its long-term impact amid unresolved trade tensions.

Sources:
ReutersFinanceIndependent+3
Updated 4m ago
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Sources: ReutersFinance
After two days of intense negotiations in London, U.S. and Chinese officials have agreed on a trade framework aimed at resolving China's export restrictions on rare earth minerals and magnets, a critical component for U.S. auto and defense industries.

U.S. Commerce Secretary Howard Lutnick stated, "We have reached a framework to implement the Geneva consensus and the call between the two presidents," emphasizing that the agreement now awaits approval from Presidents Donald Trump and Xi Jinping before implementation.

The deal includes China pledging to speed up shipments of rare earth metals, while the U.S. will ease some of its own export controls, a move described as "unprecedented" by former senior U.S. trade negotiator Wendy Cutler. This reciprocal easing aims to stabilize supply chains disrupted by China's earlier suspension of rare earth exports.

Despite this progress, the framework does not address deeper trade issues such as China's trade surplus or accusations of market dumping. Analysts caution that any new tariffs may remain higher than previous levels, and the full economic impact of ongoing trade tensions is yet to be seen.

China's Vice Commerce Minister Li Chenggang confirmed the framework will be presented to both nations' leaders, signaling cautious optimism but acknowledging the complexity of reaching a comprehensive trade deal.

The agreement marks a significant step toward easing tensions in the damaging trade war between the world's two largest economies, with potential to shift global markets, especially in sectors reliant on rare earth minerals.

Key quotes:
"The idea is we're going to go back and speak to President Trump and make sure he approves it. They're going to go back and speak to President Xi and make sure he approves it," - Howard Lutnick
"The US relenting on export controls is 'unprecedented,'" - Wendy Cutler

Key stats:
- Two days of high-level talks in London
- Rare earth minerals critical to U.S. auto and defense firms
- Framework pending approval from both presidents

This framework could reshape supply chains and trade dynamics, but experts remain skeptical about the timeline and scope of a comprehensive agreement.
Sources: Reuters
U.S. and China have agreed on a trade framework addressing rare earth export restrictions, pending approval from Presidents Trump and Xi. The deal aims to ease China's rare earth mineral limits and roll back some U.S. export controls, potentially shifting global markets amid ongoing trade tensions.
Section 1 background
The Headline

US-China trade framework agreed, awaits presidential approval

We have reached a framework to implement the Geneva consensus and the call between the two presidents. The idea is we're going to go back and speak to President Trump and make sure he approves it. They're going to go back and speak to President Xi and make sure he approves it, and if that is approved, we will then implement the framework.
U.S. Commerce Secretary Howard Lutnick
Reuters
Key Facts
  • U.S. and China concluded two days of intense trade talks in London resulting in a framework agreement aimed at resolving China's export restrictions on rare earth minerals and magnets.ReutersCnbc
  • The framework agreement includes the U.S. rolling back some export controls on advanced technology in exchange for China speeding up shipments of rare earth metals critical to U.S. auto and defense firms.UsatodayFinance
  • The framework agreement is subject to approval by U.S. President Donald Trump and Chinese President Xi Jinping before it can be implemented.ReutersUsatoday
  • U.S. Commerce Secretary Howard Lutnick described the framework as putting 'meat on the bones' of a deal reached last month in Geneva to ease retaliatory tariffs and resolve export restrictions on rare earths and magnets.Independent
  • China's Vice Commerce Minister Li Chenggang confirmed the trade framework had been reached and would be taken back to the respective heads of state for approval.Reuters
  • The framework aims to revive trade flow of sensitive goods between the U.S. and China but offers little sign of a durable resolution to longstanding trade differences.ReutersFinance
Key Stats at a Glance
Duration of trade talks in London
12hours
Finance

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Background Context

Context: Rare earth export suspension and skepticism on framework

The US relenting on export controls is 'unprecedented,' while pointing to the fragility of the current arrangement. It will still be very hard and it will take a long time for both sides to reach a comprehensive trade agreement. That sort of comprehensive deal usually takes years to be reached, so I'm sceptical that a framework reached at the meeting in London will be comprehensive.
Wendy Cutler
former senior US trade negotiator
FinanceReuters
Key Facts
  • China suspended exports of rare earth minerals and magnets in April, causing significant disruption to global supply chains and impacting industries reliant on these critical materials.Independent
  • Analysts and former negotiators express skepticism about the durability and comprehensiveness of the new trade framework, highlighting that a full trade agreement usually takes years to achieve.IndependentFinanceReuters
  • The framework does not address deeper trade issues such as China's massive trade surplus with the U.S. or allegations of dumping, which remain unresolved tensions between the two countries.FinanceReuters
Key Stats at a Glance
Days spent on disputes out of total negotiation period
30days
Independent
Total days allocated for dispute resolution
90days
Independent
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