US and China reach framework to ease export curbs and salvage trade truce

US and Chinese officials have agreed on a framework to get their trade truce back on track and resolve China’s export restrictions on rare earth minerals and magnets. US Commerce Secretary Howard Lutnick announced this on Tuesday following two days of intensive negotiations in London.

Lutnick told reporters that the framework agreement adds “concrete substance” to the deal reached in Geneva last month, which aimed to ease retaliatory tariffs that were disrupted by China’s restrictions on critical mineral exports. The agreement will also lift some recently imposed US export restrictions.

“We have reached a framework to implement the Geneva consensus and the meeting between the two presidents,” Lutnick said. “The idea is to go back and talk to President Trump and make sure he approves. They will also go back and talk to President Xi and make sure he approves. If approved, we will implement the framework.”

Top economic officials from the US and China have been pushing for a deal to ease mutual export restrictions that threatened to derail the Geneva agreement, which had lowered tariffs that had reached triple-digit figures.

In a separate briefing, Chinese Vice Minister of Commerce Li Chenggang also confirmed that a trade framework had been agreed upon to be presented to the US and Chinese leaders.

“The two sides have, in principle, reached a framework for implementing the consensus reached by the two heads of state in their phone call on June 5 and the consensus reached at the Geneva meeting,” Li told reporters.

“We hope the progress made at the London meeting will contribute to strengthening trust between China and the US and to the healthy and stable development of economic and trade ties between the two countries,” he added.

While Li did not provide details on the progress made in the talks, the parties are expected to announce the content of the agreement after receiving approval from their respective national leaders.

Lutnick stated that China’s restrictions on the export of rare earth minerals and magnets to the US would be resolved as a “fundamental” part of the framework agreement.

“There were also a series of measures implemented by the United States when these rare earths were not forthcoming. You should expect those to be lifted in a balanced way, as President Trump has said,” Lutnick noted.

The new round of negotiations, initiated by the US and China to resolve trade tensions that had escalated with mutual tariff hikes, took place on June 9-10 at Lancaster House, a government mansion within walking distance of Buckingham Palace in London.

The historic venue, which also houses the British government’s 39,000-bottle wine cellar, was provided by the British government as a neutral ground for the talks between the two economic superpowers.

The US delegation was represented by Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer. The Chinese side was represented by Vice Premier He Lifeng, who is responsible for economic relations, Minister of Commerce Wang Wentao, and International Trade Representative Li Chenggang.

The London meeting was the first face-to-face encounter between He and Bessent since the signing of the 90-day truce agreement in Geneva.

The high-stakes negotiations were initiated to prevent two challenging issues—China’s rare earth exports to the US and US controls on technology exports to China—from derailing the broader talks.

Before the first round of talks in Geneva, Bessent had warned that the high tariffs imposed by both sides amounted to an embargo on bilateral trade. Highlighting the risks, China’s exports to the US in May saw their sharpest year-on-year decline since the 2020 pandemic.

The US accused China of failing to honor its commitment made in Geneva to ease restrictions on rare earth element exports, while Beijing increased pressure on Washington to lift its technology-related export controls. China also reacted strongly to the US announcing new restrictions after the Geneva meeting.

The US accused China of foot-dragging on approving shipments of rare earth elements, which are vital for the defense, automotive, and technology sectors. The slow pace of approvals has affected manufacturing supply chains in the US and Europe.

Beijing, in turn, accused Washington of “seriously violating” the Geneva agreement by issuing new warnings about the global use of Huawei chips, halting the sale of chip design software to Chinese companies, and canceling the visas of Chinese students.

On Monday, a senior White House official indicated that Trump might ease restrictions on chip sales to China if Beijing agreed to expedite the export of rare earth elements.

This would represent a significant policy shift from the Joe Biden administration’s “small yard, high fence” approach, which sought to limit China’s ability to acquire US technology.