After two days of talks in London, the US and China have announced a new framework aimed at easing tensions and reviving stalled negotiations following a recent meeting in Geneva. Commerce Secretary Howard Lutnick characterized the agreement as "a framework to implement the Geneva consensus," focusing on removing negativity. Chinese negotiators echoed this sentiment to state media.
Key Components of the Framework
The framework suggests a potential agreement where China would expedite shipments of rare earth metals, crucial for US and global supply chains. In return, Washington might ease export controls on goods like semiconductors. The primary objective appears to be resolving immediate issues to pave the way for broader discussions, including tariffs, at a later date.
Presidential Approval Pending
The proposed agreements will be presented to US President Trump and Chinese President Xi Jinping for their review and approval. Trump has already commented on social media, claiming a deal is "done," encompassing the supply of rare earth minerals from China and increased access for Chinese students to US universities.
Tariff Clarifications
Trump's assertion that “WE ARE GETTING A TOTAL OF 55% TARIFFS” was clarified by a White House official. The figure is a combination of existing duties, including 20% tariffs on illegal drugs and migration, 10% "Liberation Day" tariffs, and sector-specific duties averaging 25% applicable to certain goods. No new tariffs are included in this calculation.
Market Reactions and Analyst Perspectives
The market's response to this initial framework has been cautiously optimistic, viewing it as a positive sign that relations may not worsen. However, analysts emphasize the need for concrete details and consistent implementation to ensure the framework's long-term effectiveness. Further analysis is required to determine the actual effective tariff rate, as various existing tariffs contribute to the overall percentage.
- Framework focuses on easing immediate tensions.
- Potential agreement involving rare earth metals and semiconductor export controls.
- Presidential approval is pending.
- Existing tariffs contribute to Trump's cited 55% tariff figure.