US, China reach deal to ease trade war

London

Top officials from the United States and China said on Wednesday that they have reached a basic agreement to restart their trade truce. The decision came after two days of serious talks and builds on a deal made last month in Switzerland.

The new plan will now be presented to US President Donald Trump and Chinese President Xi Jinping for final approval. If approved, the deal will lower tariffs and allow China to restart exports of key minerals used in electronics and electric cars.

US Commerce Secretary Howard Lutnick said that China would remove its restrictions on rare earth minerals and magnets. In return, the US is expected to lift some of its own trade limits on China. Lutnick said the changes would be made “in a balanced way,” as President Trump wants.

China controls most of the world’s supply of rare earth minerals, which are needed to make things like smartphones and EVs. During the trade war, China used this power to cut supplies to other countries.

Meanwhile, the US has blocked China’s access to important American technology, including items related to artificial intelligence.

Lutnick said the new agreement is based on the “Geneva consensus” and last week’s phone call between the two presidents. Both sides said they now have a working plan that follows the goals agreed on June 5 and during the Geneva meeting.

China’s Vice Commerce Minister Li Chenggang confirmed that both countries have agreed “in principle” to the new trade framework, which could ease tensions if approved by both leaders.