The United States and China have finalized a trade framework deal, easing tariff tensions between the two nations. According to the agreement, the US will lift “restrictive measures” against China, while China will “review and approve” items under export controls. This development comes after months of tit-for-tat tariffs on each other’s products, which were temporarily lowered following talks in Geneva in May.

The US had imposed a sweeping 10% levy on most trading partners, including China. However, the new agreement introduces a unified 55% tariff on all Chinese imports, aiming to reduce China’s pricing advantage in sectors like electronics, steel, and pharmaceuticals.

China, which dominates global production of rare earth elements, had begun requiring export licenses in early April, reportedly in response to US tariffs. The new deal ensures China’s review and approval of applications for export control items that meet legal requirements.

Both sides have agreed to a consultation framework to execute the Geneva Agreement’s terms and negotiate further. US Commerce Secretary Howard Lutnick described the pact as “signed and sealed,” calling it a “first step” toward positive trade relations.

The agreement signals a fragile step toward stabilizing the world’s most influential economic relationship.

The US aims to narrow its $300 billion trade deficit with China by boosting US exports.

The White House has indicated that Washington could extend a July deadline for steeper tariffs affecting dozens of economies.