Bessent suggests pause extension, US-China trade framework takes shape

After weeks of back and forth, the US and China have agreed on a framework to implement the Geneva consensus that helped ease tariffs.

The breakthrough came after two days of talks in London, including a marathon session on Tuesday. US Commerce Secretary Howard Lutnick said both sides had to “get the negativity out” before making progress.

“Now we can go forward to try to do positive trade, growing trade,” he said.

As part of the deal, Beijing has promised to speed up shipments of rare earth metals, a crucial component for global auto and defense industries. Washington will ease export controls.

This marks the first sign of movement on key issues. The proposal will now be presented to President Trump and China’s Xi.

Still, the discussions also did little to resolve a long-standing issue: China’s trade surplus with the US.

“Markets will likely welcome the shift from confrontation to coordination,” said Charu Chanana, chief investment strategist at Saxo Markets. “We’re not out of the woods yet — it’s up to Trump and Xi to approve and enforce the deal.”

The meeting was set up after a phone call between the two leaders, following weeks of each side accusing the other of breaking the Geneva commitments. Both countries had used chips, rare earths, student visas and ethane as bargaining tools.

Josef Gregory Mahoney, a professor at East China Normal University, said trust, not money, has been the biggest casualty of the trade war.

“We’ve heard a lot about frameworks,” he said. “But the fundamental issue remains: Chips versus rare earths. Everything else is a peacock dance.”