U.S., China reach deal to ease export curbs, keep tariff truce alive

US and Chinese officials have said that they had agreed on a framework to put their trade truce back on track and remove China's export restrictions on rare earths while offering little sign of a durable resolution to longstanding trade differences.

At the end of two days of intense negotiations in London, US Commerce Secretary Howard Lutnick told reporters the framework deal puts "meat on the bones" of an agreement reached last month in Geneva to ease bilateral retaliatory tariffs that had reached crushing triple-digit levels. He said the agreement reached in London would remove some of the recent US export restrictions, but did not provide details.

In a separate briefing, China's Vice Commerce Minister Li Chenggang also said a trade framework had been reached in principle that would be taken back to US and Chinese leaders.

The framework builds upon the groundwork that the superpowers laid in Geneva last month to ease tariffs they had taken against each other’s economies. But further details, including plans for a next round of talks, remain sparse. 

The two sides have until Aug 10 to negotiate a more comprehensive agreement to ease trade tensions, or tariff rates will snap back from about 30 per cent to 145 per cent on the US side and from 10 per cent to 125 per cent on the Chinese side.

In this photo released by Xinhua News Agency, Chinese Vice Premier He Lifeng, center right, and U.S. Treasury Secretary Scott Bessent, center left, pose for a group photo with delegations before their meeting to discuss China-U.S. trade, in London, Monday, June 9, 2025. (Li Ying/Xinhua via AP)

US President Donald Trump's shifting tariff policies have roiled global markets, sparked congestion and confusion in major ports, and cost companies tens of billions of dollars in lost sales and higher costs.

The World Bank on Tuesday slashed its global growth forecast for 2025 by four-tenths of a percentage point to 2.3 per cent, saying higher tariffs and heightened uncertainty posed a "significant headwind" for nearly all economies.

A resolution to the trade war may require policy adjustments from all countries to treat financial imbalances or otherwise greatly risk mutual economic damage, European Central Bank President Christine Lagarde said on a rare visit to Beijing on Wednesday.