U.S. and China reach trade accord aiming to resolve tariff conflict
Trade Tensions Ease as U.S. and China Announce Deal
In a surprising turn of events, the trade war between the U.S. and China seems to be cooling down with the recent announcement of a new agreement between the two economic giants.
On Thursday, President Donald Trump declared that he had signed a deal related to trade with China, but provided little detail. However, a White House official later confirmed that the U.S. had agreed to an "additional understanding for the application framework of the Geneva agreement."
China swiftly stated that an agreement had indeed been reached, stating that "both parties confirmed the details of the framework." The agreement includes China committing to review and approve export control applications for materials that meet legal requirements, with the U.S. responding by lifting a series of restrictive measures previously imposed.
One of the key areas of contention was the supply of rare earth elements, critical components in manufacturing electric batteries, wind turbines, and defense systems. China, which dominates the extraction of these elements, had implemented export controls at the beginning of April. These measures were interpreted as a response to the tariffs imposed by President Trump.
The U.S. and China had previously agreed in May to temporarily reduce high tariffs they impose on each other's products, following talks in Geneva. However, U.S. officials later accused China of violating the pact and slowing down rare earth export license approvals.
After negotiations held this month in London, both parties agreed on a framework to advance their Geneva consensus. Trump also had a phone conversation with Chinese President Xi Jinping. Treasury Secretary Scott Bessent stated that "now I am sure that, as we agreed, the magnets will flow."
This agreement comes as positive news for the global economy, with Wall Street responding optimistically, the U.S. S&P index breaking records after the April falls. In Europe, the main stock exchanges also registered gains, while in Asia, trends were mixed.
The White House also indicated that it might postpone the July deadline for the entry into force of higher tariffs on imports from dozens of countries. Trump had imposed a 10% tariff on most of his trading partners this year but also announced higher tariffs on dozens of economies while reaching a deal, although he eventually suspended this decision.
Leavitt, a White House spokesperson, mentioned that it was up to President Trump to decide whether to extend the moratorium on higher tariffs announced in April. According to Leavitt, Trump could give countries a deadline to propose a deal or offer a reciprocal tariff rate he considers beneficial for the U.S.
Sources: AFP, Reuters
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In accordance with the announcements, the U.S. and China have reached a new deal in their trade relations, addressing policy-and-legislation concerns related to rare earth elements and export control applications, as confirmed by both parties. This development is likely to have significant implications for global politics and general-news, particularly regarding upcoming policies and the impact on the global economy.
