China and U.S. agree on trade truce

After two days of intense negotiations in London, U.S. Commerce Secretary Howard Lutnick said the framework agreement fleshes out a tentative agreement reached last month in Geneva. At that time, the U.S. and China agreed to reduce mutual trade duties, which were already reaching crushing levels of hundreds of percent, Reuters reported.

However, the agreement in Geneva ran into a problem: China continued to restrict exports of important minerals. In response, the Trump administration has imposed its own export restrictions, specifically banning shipments to China of chip design software, airplanes and other goods.

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Latnick said the London agreement provides for the lifting of some recent U.S. export restrictions, but did not provide specific details.

“We have reached a framework agreement to implement the understandings from Geneva and the phone call between the two presidents,” Lutnick said. - Now we have to go back to President Trump to get him to approve it. The Chinese side will do the same with Xi Jinping. If both agree, we will start the implementation.”

Chinese Vice Commerce Minister Li Chengang confirmed that the two sides have reached a preliminary agreement, which must now be approved by the leaders of both countries.

While such an agreement could keep the Geneva deal from being completely derailed by mutual export restrictions, it does little to change key disagreements - particularly over Trump's unilateral duties and longstanding U.S. criticism of China's model of state-driven, export-oriented development.

The two sides have until August 10 to agree on a more comprehensive agreement, otherwise tariffs will rise again: on the US side, from about 30% to 145%, and on the Chinese side, from 10% to 125%.

Photo: ukragroconsult.com.