London (AFP) – Top officials from the United States and China said Tuesday that they had agreed on a “framework” to move forward on trade, following two days of high-level talks in London to resolve tensions. US Commerce Secretary Howard Lutnick expressed optimism after a full day of negotiations that concerns surrounding rare earth minerals and magnets “will be resolved” eventually, as the deal is implemented. But this framework will first need to be approved by leaders in Washington and Beijing, officials said, at the end of meetings at the British capital’s historic Lancaster House.
All eyes were on the outcomes of negotiations as both sides tried to overcome an impasse over export restrictions. US officials earlier accused Beijing of slow-walking approvals for shipments of rare earths. The world’s two biggest economies were also seeking a longer-lasting truce in their escalating tariffs war, with levies currently only temporarily on hold. “We’re moving as quickly as we can,” US Trade Representative Jamieson Greer told reporters. “We would very much like to find an agreement that makes sense for both countries,” he added, noting that the relationship was complex. “We feel positive about engaging with the Chinese,” he maintained.
Speaking separately to reporters, China International Trade Representative Li Chenggang said: “Our communication has been very professional, rational, in-depth and candid.” Li expressed hope that progress made in London would help to boost trust on both sides.
– Productive talks –
US Treasury Secretary Scott Bessent earlier described the closely-watched trade talks as productive, although scheduling conflicts prompted his departure from London with negotiations still ongoing. Bessent, who led the US delegation with Lutnick and Greer, left early to return to Washington for testimony before Congress, a US official told AFP. Chinese Vice Premier He Lifeng headed his country’s team in London, which included Li and Commerce Minister Wang Wentao. Both sides do not yet have another gathering scheduled.
But Lutnick said Tuesday that US measures imposed when rare earths “were not coming” would likely be relaxed once Beijing moved forward with more license approvals. Global stock markets were on edge, but Wall Street’s major indexes climbed on hopes for progress earlier Tuesday. The London negotiations follow talks in Geneva last month, which saw a temporary agreement to lower tariffs. This time, China’s exports of rare earth minerals — used in a range of things including smartphones, electric vehicle batteries, and green technology — were a key issue on the agenda.
“In Geneva, we had agreed to lower tariffs on them, and they had agreed to release the magnets and rare earths that we need throughout the economy,” US President Donald Trump’s top economic adviser, Kevin Hassett, told CNBC on Monday. Even though Beijing was releasing some supplies, “it was going a lot slower than some companies believed was optimal,” he added.
– ‘Mirror arsenal’ –
Both countries “have developed almost a mirror arsenal of trade and investment weapons that they can aim at each other,” said Emily Benson, head of strategy at Minerva Technology Futures. As they tap economic tools to try and shift global power structures, she told AFP, it may not be reasonable to expect a typical trade and investment deal. But both sides could find ways to level off a downward spiral. A dialing-down of temperatures could involve Chinese efforts to shore up the process for granting export control licenses, Benson said. She noted Beijing appeared understaffed given the volume of requests. On the US side, this could look like a relaxation of certain export curbs in the high-tech domain, she added.
But observers remained cautious, with Thomas Mathews of Capital Economics warning that Washington was unlikely to “back off completely.” This could weigh on markets. Since returning to office, Trump has slapped a 10 percent levy on friend and foe, threatening steeper rates on dozens of economies. His tariffs have dented trade, with Beijing data showing Chinese exports to the United States plunged in May. The World Bank on Tuesday joined other international organizations to slash its 2025 global growth forecast amid trade uncertainty. China is also in talks with partners including Japan and South Korea to try to build a united front countering Trump’s tariffs.
© 2024 AFP
