US and China agree on new trade deal

The United States and China, after two days of intense negotiations in London, reached a framework agreement that should restore normal trade between them. According to the New York Times, the negotiations lasted more than 20 hours and at times became so tense that it seemed that they might break down.

Following the meeting, the Chinese side promised to accelerate the supply of rare earth metals, which are critical for the American automotive and defense industries, and the United States agreed to ease export controls on software for semiconductor production, nuclear and aerospace components, chemicals, and aircraft parts.

The ban on enrolling Chinese students in American universities will also be lifted.

The results of the agreements still need to be approved by the leaders of the states – Donald Trump and Xi Jinping.

The talks in London came after a preliminary agreement reached in Geneva, which included a 115-point tariff cut and a 90-day trade truce, appeared to be in danger of falling apart, the Financial Times reported.

The US has accused China of delaying the issuance of rare earth export licenses, while China has described the new US export restrictions as a “serious breach” of the Geneva agreement.

Analysts, however, were cautiously optimistic about the deal but raised serious concerns about its durability.

The deal must be implemented before the 90-day tariff pause expires in August. Now a month later, the next 60 days will be critical in resolving broader issues in the trade relationship between the two countries. These include unfair trade practices and the production of fentanyl, which Trump has been vocal about.

As reported, on April 2, President Donald Trump announced the introduction of 10% tariffs on all imports of goods into the United States. Additional tariffs were imposed against 74 countries and the EU with which the United States has a negative foreign trade balance.

In particular, tariffs on China were initially 34%. In response, China responded in kind to the introduction of new increased tariffs by the administration of US President Donald Trump, setting tariffs on all American imports at 34%. China was one of the few countries that immediately mirrored the introduction of tariffs by Trump.

On April 9, Trump announced a 90-day pause in tariff increases for most countries, but continued to raise tariffs on Chinese goods. As a result, the US tariff rate on Chinese imports is currently 145%.

Tags: China, USA