U.S. and China Reach Preliminary Deal After Two Days of Talks

Quick overview

Washington and Beijing advanced toward a preliminary agreement following two days of high-level negotiations in London.

The understanding, which still requires approval from Presidents Donald Trump and Xi Jinping, includes key commitments on rare earth elements and technology, and paves the way for further rounds of bilateral talks.

U.S. and Chinese representatives reached a tentative consensus on trade matters at the conclusion of the second day of negotiations in the British capital. The agreement will now be reviewed and must be ratified by both leaders before it can come into effect.

“We’ve laid a solid foundation to move forward with the implementation of the consensus previously reached in Geneva and in line with the recent conversation between our leaders,” said U.S. Secretary of Commerce Howard Lutnick during a press conference.

His remarks were echoed by Chinese Vice Minister of Commerce Li Chenggang, who confirmed the progress and reiterated both sides’ commitment to ongoing dialogue.

Lutnick also announced that he would return to Washington alongside U.S. Trade Representative Jamieson Greer to present the agreement to President Trump. Once President Xi also signs off, “we will move forward with activating the agreed framework,” he added. However, the requirement for presidential approval in both capitals underscores that some sensitive issues still need further review and internal consensus.

The Strategic Role of Rare Earths

A central pillar of the agreement involves China’s restrictions on rare earth exports to the United States—materials considered vital for numerous tech and defense industries. Lutnick emphasized that this issue is “a fundamental component” of the deal and expressed confidence that it would be resolved during the implementation phase.

He also suggested that Washington’s restrictions on the sale of advanced technology to Chinese firms could be lifted, provided that Beijing ensures a stable supply of these strategic minerals.

Future Rounds on the Horizon

Sources within the Chinese delegation indicated that bilateral talks will continue in the coming months, aiming to deepen the understanding reached in London. Meanwhile, China’s state news agency Xinhua highlighted that the Xi administration views the progress made as a step toward rebuilding mutual trust.

The negotiations underscore the strategic nature of the economic relationship between the two powers: while the U.S. seeks to secure access to rare earths, China is pushing to regain access to cutting-edge technologies—such as next-generation microchips—produced by American firms.

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Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.

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