US and China Reach Framework Agreement to Implement Trade Deal

Jun 11, 2025 at 11:29 AM
Slide 3
Slide 1
Slide 2
Slide 3
Slide 1

The United States and China have achieved a significant milestone in their trade relations by establishing a framework for implementing the trade agreement reached last month in Geneva. This development follows two days of negotiations in London and a recent phone conversation between Presidents Donald Trump and Xi Jinping. Both nations had previously accused each other of violating the terms of the May détente, which involved reduced tariffs. The framework's specifics remain undisclosed, but it focuses on encouraging Beijing to enhance its exports of rare-earth minerals and magnets while seeking eased restrictions on technology sales from the US.

Secretary Howard Lutnick expressed optimism about President Trump's imminent approval of the agreement. He emphasized that the framework would address issues related to rare-earth minerals and magnets concerning the United States. Meanwhile, Chinese negotiators requested the relaxation of restrictions on technology and goods sales to China. Despite the lack of detailed information, both sides agreed in principle to proceed with the implementation process upon presidential approvals.

Progress in US-China Trade Negotiations

After several rounds of discussions, the US and China have made substantial progress towards resolving their trade disputes. The recent meetings in London marked a pivotal moment, as both countries devised a framework aimed at actualizing the consensus reached in Geneva. Secretary Lutnick highlighted the importance of this framework, asserting that it would facilitate the resolution of key trade issues, particularly regarding rare-earth minerals and associated products. With the expectation of swift approval from both presidents, the path forward appears promising.

Throughout the negotiations, American representatives led by Secretary Lutnick and Treasury Secretary Scott Bessent focused on urging China to boost its exports of rare-earth materials and magnets. These elements are crucial for various technological and industrial applications. On the other hand, Chinese negotiators sought the easing of US-imposed restrictions on technology and goods sales. Although specific details of the framework remain undisclosed, the mutual agreement in principle signifies a step forward in fostering healthier trade relations. Lutnick’s confidence in the framework's effectiveness underscores the potential for positive outcomes in the near future.

Challenges and Opportunities in Bilateral Trade Relations

Despite the advancements, challenges persist in the US-China trade relationship. Earlier accusations by China regarding discriminatory measures imposed by the US, such as export control guidelines for AI chips and restrictions on chip design software (EDA) sales, highlight lingering tensions. However, the establishment of a framework represents an opportunity for both nations to address these concerns systematically. By focusing on critical supply chains and strategic resources, the US aims to strengthen domestic production capabilities.

While the specifics of the framework remain undisclosed, its emphasis on resolving issues related to rare-earth minerals and magnets indicates a shared commitment to overcoming obstacles. The US administration, under President Trump's directive, is committed to reshoring critical supply chains, including magnet production. This initiative aligns with broader efforts to bolster national security and economic resilience. Furthermore, the willingness of both parties to engage constructively in negotiations suggests a readiness to explore mutually beneficial solutions, paving the way for enhanced cooperation and stability in global trade dynamics.