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The China-US trade talks in London, concluding on June 10, 2025, resulted in a framework agreement aimed at implementing a prior trade truce from Geneva in May 2025. Both sides reached a consensus to de-escalate tensions, but specific details remain limited. Here’s a breakdown of the outcomes for both sides based on available information:
For the United States:
• Rare Earth Minerals Access: The US secured commitments from China to ease export restrictions on rare earth minerals and magnets, critical for industries like automakers, aerospace, semiconductors, and defense. China granted temporary export licenses to suppliers for the top three US automakers, addressing shortages caused by China’s earlier restrictions in April 2025.
• Easing of US Export Controls: In exchange, the US agreed to relax some export controls on goods to China, particularly those imposed for national security reasons, though restrictions on critical technology like advanced semiconductors remain firm.
• Trade Deficit Reduction Efforts: The US continues to push for China to purchase more American goods to address the $295 billion trade deficit, a key demand from the Trump administration. The framework aims to build on the Geneva consensus to work toward this goal.
• Temporary Tariff Relief: The agreement reinforces the 90-day tariff pause from Geneva, with US tariffs on Chinese goods reduced from 145% to 30%. This provides temporary relief for American businesses and consumers facing potential price hikes or shortages.
For China:
• Eased US Restrictions: China benefits from the US easing some export controls, potentially improving access to certain US goods, though high-end technology like semiconductors remains restricted.
• Student Visa Access: The framework includes provisions allowing Chinese students access to US universities, addressing recent restrictions.
• Trade Stabilization: China avoids further escalation of the trade war, which has severely impacted its exports to the US (down 34.5% year-on-year in May 2025). The framework supports stabilizing economic relations, boosting Asian stock markets like the CSI 300 and Hang Seng.
• Maintaining Leverage: China retains significant leverage through its near-monopoly on rare earths, with analysts noting Beijing may continue to use export controls strategically, though it has signaled willingness to increase license approvals.
Shared Outcomes:
• Framework Agreement: Both sides agreed “in principle” on a framework to implement the Geneva consensus, pending approval from Presidents Trump and Xi Jinping. This framework aims to address trade imbalances, rare earth exports, and technology restrictions, though specifics are unclear.
• Continued Dialogue: The talks establish a consultation mechanism for ongoing trade discussions, with both sides motivated to avoid a full-blown trade war that could disrupt global supply chains and economic growth.
• Global Economic Stability: The agreement mitigates fears of a deepening trade war, with the World Bank noting that heightened trade tensions pose a “significant headwind” to global growth (forecast cut to 2.3% for 2025).
Limitations and Uncertainties:
• Lack of Detail: The framework’s specifics are vague, and its implementation depends on approval from both leaders, leaving room for skepticism about its durability.
• Temporary Measures: The agreement primarily reinforces the Geneva truce rather than resolving deeper issues like China’s state-led economic model or US technology restrictions. Analysts suggest a comprehensive deal is unlikely soon.
• Ongoing Tensions: Issues like fentanyl trade, technology transfers, and China’s export-driven model remain unresolved, with only 60 days left in the 90-day tariff pause (expiring August 2025).
In summary, the US gains improved access to critical rare earths and temporary tariff relief, while China secures eased US export controls and student visa access. Both sides benefit from a framework to continue dialogue and avoid further economic disruption, but the agreement is seen as a temporary fix rather than a resolution of fundamental trade disputes.