The United States and China have reached a long-awaited trade agreement, following two days of high-level discussions in London this week.
“We have reached a framework to implement the Geneva consensus and the call between the two presidents,” U.S. Commerce Secretary Howard Lutnick said, referring to a phone conversation last week between President Donald Trump and Chinese President Xi Jinping that set the tone for further bilateral talks.
China's trade envoy Li Chenggang echoed Lutnick's comments, calling the agreement a “step forward” in restoring trust, following the stalled implementation of the Geneva consensus, owing to accusations of non-compliance from both sides.
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Lutnick said both sides will now seek final approval from their respective leaders before proceeding with the framework. “If Xi also approves it, then we will implement the framework,” he said.
Why It Matters: Analysts and observers are weighing in on the announcement, with some criticizing it as nothing but the “status quo” being maintained.
Writer for Fast Magazine and The Atlantic, James Surowiecki, posted on X saying that “the U.S. and China have agreed to keep their previously-agreed-upon agreement, which was not a deal, but just restored the pre-Liberation-Day status quo.”
Economist Peter Schiff asks, “What victory has the U.S. really won from this war?” since both sides have only retreated from positions implemented after the trade war began.
The markets have reacted modestly to the announcement, with China’s Shanghai Shenzhen CSI 300 index, tracked by the Xtrackers Hvst CSI 300 China ETF (NYSE:ASHR), up 0.83%, trading at 3,897.44 points.
U.S. Futures, however, are down Tuesday night, with the S&P 500 futures down 0.29%, trading at 6,027.75, Nasdaq futures down 0.27%, at 21,903.50, and finally the Dow Jones futures, trading at 42,810.00, down 0.24%.
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