The US and China revive their trade pact and truce to stem escalating tensions.

After two days of marathon sessions, particularly on Tuesday, the United States and China reached a framework agreement in London to revive and restore implementation of the Geneva trade pact, signed in mid-May in the Swiss city, according to representatives from both sides. This step is aimed at reducing the economic tensions that have escalated in recent weeks.

“The two largest economies in the world have reached an agreement on a trade framework. We will begin implementing it after President Trump approves it and China also obtains President Xi’s approval. This is the process we will follow,” Commerce Secretary Howard Lutnick explained in the British capital, alongside U.S. Trade Representative Jamieson Greer. Treasury Secretary Scott Bessent had to leave the meeting early because he had to fly back to Washington for a hearing before Congress on Wednesday.

One of the Chinese negotiators, Li Chenggang, agreed with Lutnick's remarks and said the two sides "agreed in principle." A key objective of the negotiations for Washington's representatives was for China to accelerate the export of rare earth minerals and magnets containing them, as Beijing's envoys had agreed in Geneva.

In return, the Chinese delegation, led by Vice Minister He Lifeng, a close confidant of Xi Jinping, demanded that the United States significantly ease restrictions on the sale of US technology and other products to China.

The appeals court reiterates that tariffs that a court found illegal are still in effect for now.

The meeting concluded with the appeals court's decision to continue maintaining the reciprocal tariffs, a decision already made on May 29, after a New York-based federal trade court had declared the tariffs illegal the day before. The appeals court judges upheld the temporary stay on Tuesday, pending oral arguments from each side on July 31.

London negotiators did not reveal exactly what they have agreed upon as part of this framework, which could create continued uncertainty about the trade truce. It also provides evidence that this process requires Trump's approval to unravel some of the controls requested by Beijing's representatives.

Lutnick highlighted the importance of the call last week between the two presidents, Donald Trump and Xi Jinping, in this negotiation.

The Geneva agreement established a 90-day pause, expiring on August 12, to negotiate the tariffs. During this pause, the US reduced taxes on Chinese exports from 145% to 30%, while Beijing cut US imports from 125% to 15%.

This new agreement restores the pact that allowed both sides to reduce tariffs and should resolve issues related to the aforementioned rare earth minerals, an issue that led to Trump's accusation that China had violated the Geneva Pact and was slowing exports of these elements, essential for advanced U.S. industries.

China processes virtually all rare earth metals, a group of 17 metals used in a wide range of defense, medical, and technology products. As part of retaliation for Trump's tariff hike, Beijing restricted exports of several of these minerals this month, increasing the risk that US industries would face shortages.

“There should no longer be any questions about the complexity of rare earth products,” Lutnick said at the end of the meeting, echoing Trump's remarks after his talks with Xi.