US president Donald Trump has said a trade framework with China has been completed, with Beijing supplying rare earths and magnets “UP FRONT” and the US allowing Chinese students into its colleges and universities.
The US and China will maintain tariffs at their current, lower levels following the two nations’ agreement this week in London, Mr Trump said on Wednesday. That number is still higher than before the president took office. Mr Trump said Chinese president Xi Jinping and he must still formally sign off on the agreement.
“OUR DEAL WITH CHINA IS DONE, SUBJECT TO FINAL APPROVAL WITH PRESIDENT XI AND ME,” Trump posted on social media. “WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%. RELATIONSHIP IS EXCELLENT!”
Mr Trump’s comments on his Truth Social network prompted fresh questions about the terms of the pact US and Chinese negotiators reached Tuesday. Markets had a mixed reaction on Wednesday, with US equity indexes fluctuating throughout the day.
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In a later post, Mr Trump said Mr Xi and he “are going to work closely together to open up China to American Trade. This would be a great WIN for both countries!!!”
The framework, which restores a truce in their trade war, comes after two days of marathon negotiations in London.
The breakthrough late on Tuesday followed an agreement in Geneva last month aimed at easing trade tensions between the world’s two economic superpowers, which had faltered over differences regarding Chinese rare earth exports and US export controls.
The US team, which included commerce secretary Howard Lutnick and US trade representative Jamieson Greer, will return to Washington to present the deal to Mr Trump, Mr Lutnick said. He did not provide any details about the framework.
Li Chenggang, China’s vice-minister of commerce, described the talks as “rational, in-depth and candid”, and said the sides had agreed to implement the consensus reached in Geneva and in a phone call between Mr Trump and Mr Xi last week, according to state news agency Xinhua.
He expressed hope that the progress made in London “will be conducive to strengthening trust between China and the United States”.
China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks rose 0.8 per cent on Wednesday, while Hong Kong’s Hang Seng benchmark was up about 1 per cent.
Both countries agreed in Geneva last month to slash their respective tariffs by 115 percentage points and provided a 90-day window to resolve the trade war.
But the ceasefire came under pressure after Washington accused Beijing of reneging on an agreement to speed up the export of rare earths, while China criticised new US export controls.
The US team, which also included treasury secretary Scott Bessent, had held two days of talks with the Chinese delegation, led by He Lifeng, a vice-premier responsible for the economy. Earlier on Tuesday, Mr Lutnick said the talks could stretch into a third day.
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Mr Bessent left London before the talks ended to return to Washington ahead of a previously scheduled plan to testify before Congress on Wednesday.
The talks were held in the historic Lancaster House mansion in central London, which was provided by the British government as a neutral ground for the talks.
The negotiations were launched to ensure Chinese exports of rare earths to the US and American technology export controls on China did not derail broader talks between the sides.
In advance of the first round of talks in Geneva, Mr Bessent had warned that the high level of mutual tariffs had amounted to an effective embargo on bilateral trade.
Chinese exports to the US fell more steeply in May compared to a year earlier than at any point since the pandemic in 2020.
The US had said China was not honouring its pledge in Geneva to ease restrictions on rare earths exports, which are critical to the defence, car and tech industries, and was dragging its feet over approving licences for shipments, affecting manufacturing supply chains in the US and Europe.
Beijing has accused the US of “seriously violating” the Geneva agreement after it announced new restrictions on sales of chip design software to Chinese companies.
It has also objected to the US issuing new warnings on global use of Huawei chips, and cancelling visas for Chinese students.
On Monday, a senior White House official indicated that Mr Trump could ease restrictions on selling chips to China if Beijing agreed to speed up the export of rare earths.
That would amount to a significant policy shift from former president Joe Biden’s administration, which implemented what it called a “small yard, high fence” approach to restrict Beijing’s ability to obtain US technology that could be used to help its military.
Separately, a US federal appeals court on Tuesday allowed some of Mr Trump’s broadest tariffs to remain in place while it reviews a lower-court ruling that had blocked his “liberation day” levies on US trading partners.
The ruling extended an earlier, temporary reprieve, and will allow Mr Trump to enact the measures as well as separate levies targeting Mexico, Canada and China. The president has however already paused the wider “reciprocal” tariffs for 90 days. – Copyright The Financial Times Limited 2025 with additional reporting from Bloomberg
