The United States and China have come to an agreement on a framework for a trade deal, according to both nations’ officials.
At a White House event on Thursday, President Donald Trump announced the signing of a trade agreement with China, expressing optimism about a future deal with India as well.
However, both Beijing and White House representatives described the development as a framework agreement rather than a finalized deal.
Commerce Secretary Howard Lutnick stated in a Bloomberg TV interview that the deal had been finalized earlier in the week, but neither he nor President Trump provided specifics regarding the agreement.
“We just signed with China the other day,” President Trump mentioned during the event.
Lutnick confirmed that the deal was “signed and sealed” two days prior to the announcement, but details on the terms remained unclear.
This recent accord raises questions about its distinction from a previous deal announced by President Trump two weeks earlier, which aimed to facilitate American industries’ access to rare earth minerals and magnets crucial for various sectors.
The initial pact allowed trade discussions to move forward, with the U.S. also agreeing to cease revoking visas for Chinese nationals studying in the United States.
On Friday, China’s Commerce Ministry stated that the two parties had “further confirmed the details of the framework,” but did not explicitly mention U.S. access to rare earth minerals.
These minerals are vital for manufacturing high-tech products, including defense equipment and electric vehicles, and China currently holds a dominant position in their global production.
China’s Commerce Ministry highlighted that they would approve export applications for controlled items that meet legal conditions, expecting corresponding actions from the United States.
This agreement followed initial discussions in Geneva earlier in May, which led to both nations delaying significant tariff increases that had threatened to paralyze trade between them.
Subsequent negotiations in London established a framework for further discussions, with the latest deal appearing to formalize what had been settled.
A White House official stated that the Trump administration and China had reached an additional understanding to implement previous agreements made in Geneva.
This clarification came shortly after President Trump’s announcement of a “deal,” made during an event urging Republican lawmakers to favor a substantial tax and budget bill pending before Congress.
While China has not disclosed any new agreements, it announced earlier this week that it would expedite the approval of rare earth export licenses.
The limits placed by Beijing on rare earth exports have been a longstanding source of tension between the two countries.
The Chinese Ministry of Commerce detailed plans to speed up the review process for export license applications related to rare earths, indicating that some compliant applications had already been approved.
The latest trade negotiations have placed a significant focus on export controls of these minerals, overshadowing tariffs.
Since China imposed permit requirements on seven rare earth elements in April, there have been escalating concerns regarding disruption in the production of crucial technologies ranging from cars to renewable energy solutions.
Additionally, the fentanyl issue remains a critical component of the ongoing trade dialogue.
China recently announced plans to categorize two more substances as precursor chemicals for fentanyl, imposing regulations on their production and transport.
President Trump has called on China to do more to curb the export of such precursor chemicals to Mexican drug cartels, which then manufacture fentanyl for sale in the United States.
In response to this issue, President Trump initially set 20% tariffs on Chinese imports, contributing to the overall 30% tariffs currently levied against Chinese goods.
The Geneva agreement mentioned earlier stipulated that both countries would work to roll back harmful tariff increases imposed during the trade war, although some tariffs, including those related to fentanyl and aluminum and steel imports, remain unchanged.
Both Beijing and Washington are feeling the impact of the ongoing trade disputes, with the economic consequences evident in their respective economic performances.
The U.S. economy showed a contraction at a 0.5% annual rate for the first quarter from January through March, largely attributed to businesses and consumers hastily purchasing foreign goods ahead of potential tariffs.
In China, factory profits plummeted more than 9% in May year-on-year, significantly affecting the automotive sector, among others.
President Trump and other U.S. officials continue to express confidence in securing trade agreements with several other countries, including India.
“We’re going to have deal after deal after deal,” Lutnick asserted, reflecting a commitment to ongoing negotiations globally.
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