US-China Reach Tentative Trade Deal to Ease Export Curbs, Sustain Tariff Truce

The United States and China have reached a framework agreement aimed at easing recent export restrictions and maintaining their fragile trade truce, US and Chinese officials confirmed following two days of negotiations in London.

US Commerce Secretary Howard Lutnick said the agreement reinforces last month’s Geneva consensus, which had faltered due to China’s curbs on rare earth exports. These restrictions had prompted the US to impose its own export controls on semiconductors, aircraft parts, and other key goods.

The London deal includes the rollback of some US export restrictions and China’s commitment to lift rare earth export bans. Specifics, however, remain pending approval from Presidents Trump and Xi Jinping.

While the framework prevents immediate escalation, it doesn’t resolve deeper disputes over tariffs and China’s state-driven trade practices. The nations have until August 10 to finalize a broader accord, or tariffs could revert to steep levels—up to 145% in the US and 125% in China.

Market reactions were cautious. While Asian shares rose slightly, analysts noted that meaningful progress hinges on the deal’s fine print, especially on critical minerals and tech exports.

The talks gained momentum after a rare call between Trump and Xi last week. Meanwhile, US data shows China’s exports to the US plunged 34.5% in May, reflecting the ongoing strain.

The World Bank recently downgraded its global growth forecast, citing tariffs and trade uncertainty as significant risks. European Central Bank President Christine Lagarde, on a visit to Beijing, emphasized that a resolution will require coordinated policy shifts to avoid broader economic fallout.