The United States and China have signed a new trade agreement aimed at de-escalating tensions between the world’s two largest economies, China’s Ministry of Commerce confirmed on Friday.
The announcement marks a significant step toward stabilising a relationship that has been strained in recent years by tit-for-tat tariffs and disputes over key industrial materials.
According to a statement issued by the Chinese Ministry of Commerce, Beijing will continue to grant export permits for certain controlled items. In return, the United States has agreed to lift a series of restrictive measures previously imposed on Chinese goods and companies.
The agreement follows a series of high-level meetings and months of back-and-forth negotiations.
The news was echoed by US President Donald Trump, who told reporters at the White House on Thursday evening, “We just signed with China yesterday,” though he did not elaborate further.
Talks initially began in early May in Geneva, where both sides agreed to suspend looming tariff increases that threatened to disrupt trade flows across a wide array of industries.
Further discussions in London helped define the framework for what has now become a formalised agreement.
A major sticking point in recent negotiations has been China’s control over rare earth exports. These minerals are critical to the production of high-tech items such as electric vehicles, robotics, and renewable energy equipment.
Earlier this year, China introduced tighter permitting regulations on seven key rare earth elements, sparking concern in the US and other major economies reliant on these supplies.
China’s Commerce Ministry said it had started accelerating approvals for export licenses related to these materials and had already greenlit a number of applications. The move was seen as a goodwill gesture to address US concerns.
Although the new agreement calls for both parties to roll back several punitive tariffs, not all trade barriers are being removed. Some tariffs imposed by the US remain in place, particularly those related to the trade of fentanyl and duties on aluminium and steel products.
The economic fallout from the prolonged trade tensions has been felt on both sides. In the first quarter of the year, the US economy contracted at an annual rate of 0.5%, a decline partly attributed to a surge in imports ahead of anticipated tariff hikes.
Meanwhile, Chinese factory profits were down by over 9% in May compared to the same period last year, with the auto industry among the hardest hit.
Despite the remaining challenges, US officials have expressed optimism about the path ahead. There is a growing expectation that Washington will reach similar trade arrangements with other key partners, including India.
“We’re going to have deal after deal after deal,” said Howard Lutnick, an American business executive involved in trade policy discussions.
Source: EURONEWS
