Brussels – The United States and China are reportedly on the verge of suspending tariff escalations that have strained their economic relationship, which has heightened concerns of a trade war between the world’s two largest economies.

President Donald Trump shared on social media that an agreement had been reached and is awaiting final approval from both his administration and Chinese President Xi Jinping.

Details regarding this preliminary agreement remain sparse following two days of negotiations in London.

However, it has been disclosed that Beijing committed to resuming unrestricted exports of magnets and rare earths to the United States, while Washington has retreated from earlier threats to suspend visas for Chinese students.

Currently, the US maintains a tariff pressure of approximately 55 percent on Chinese goods, which represents a reduction from the 145 percent previously in place.

This includes a 10 percent reciprocal tariff as well as a 20 percent tariff imposed due to concerns over China's role in amplifying fentanyl trade.

In response, China is set to lower its tariffs on US goods from 125 percent to 10 percent.

Despite the announced agreement, analysts caution that the optimism expressed by the White House may be unwarranted.

Negotiations led to only incremental steps, with neither side making substantial progress toward a definitive trade pact, referred to as the Comprehensive Trade Agreement, which Trump aims to finalize by the end of summer.

In recent weeks, the two countries have engaged in reciprocal accusations of violating previous terms, leading to an accelerated tariff escalation that threatens to adversely impact both economies.

China’s failure to eliminate restrictions on the export of rare earth materials prompted the US to limit sales of semiconductors, software, and chemicals, also reiterating threats regarding visa restrictions.

A Chinese deputy minister noted that the discussions in London resulted in a framework agreement that requires further action, based on earlier commitments from a June 5 telephone call between the leaders and prior discussions in Geneva.

US Commerce Secretary Howard Lutnick acknowledged that while the talks have organized priorities, the path forward remains challenging, emphasizing that reaching a more comprehensive resolution will be time-consuming.

On the geopolitical front, some analysts assert that the US position could lead to precarious outcomes, as China may possess alternative trade channels that the US does not.

The potential repercussions for critical US industries dependent on Chinese resources are substantial, causing concern among stakeholders regarding the balance of trade negotiations.

Meanwhile, the European Union remains cautious, with officials stating that they will closely monitor the US-China agreement to gauge its impact on their economy.

The EU continues to face tariffs on steel and aluminum imports from the US, which are currently at 50 percent.

Trade Commissioner Maroš Šefčovič has registered the developments as positive but has urged for further clarity on the ramifications for Europe.

The G7 meeting scheduled in Kananaskis, Canada from June 15 to 17 and NATO Summit set for June 24-25 in The Hague are positioned as critical platforms where further discussions might unfold.

The potential for a bilateral meeting between Trump and EU Commission President Ursula von der Leyen remains uncertain, as both parties explore trade dynamics amid changing global economic conditions.