The United States and China have agreed on a provisional framework aimed at halting further escalation in their simmering trade conflict, offering a temporary lifeline to global markets. The deal, reached in London after two days of high-level negotiations, includes mutual pledges to ease export restrictions and sustain a fragile tariff ceasefire.
U.S. Commerce Secretary Howard Lutnick described the agreement as an extension of earlier diplomatic progress made in Geneva and in direct presidential communications. “We have reached a framework to implement the Geneva consensus,” Lutnick said, though he acknowledged that final approval from both governments is still pending.
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A major breakthrough in the deal is China’s agreement to lift its curbs on rare earth exports — critical materials for electric vehicles, military equipment, and green technologies. In exchange, the U.S. signaled a willingness to ease its own export controls on semiconductor tools and high-tech components, although no detailed rollback was provided.
Despite the progress, both sides admitted that significant divisions remain. If a comprehensive agreement is not finalized by August 10, steep tariffs will automatically return — up to 145% on U.S. imports from China and 125% on Chinese goods coming into the U.S. Analysts warned this would severely strain global supply chains.
Market response was measured, with investors showing cautious optimism. Experts noted the deal mostly reinstates the status quo but may still offer relief from further deterioration in economic ties.
