The US and China ended two days of high-stakes trade talks with a plan to revive the flow of sensitive goods — a framework that now awaits the blessing of Donald Trump and Xi Jinping.

After about 20 hours of negotiations in London, US Commerce Secretary Howard Lutnick said the two sides had laid out a framework for implementing the Geneva consensus that lowered tariffs last month. "First of all, we have to get rid of the negatives," he said. "Now, we can move forward to try to have positive trade, to increase trade."

While the more upbeat tone should reassure investors worried about the decoupling of the world's largest economies, details are scant and the deal could still be scuttled by top leaders. The discussions also did little to fix issues such as China's large trade surplus with the US, and Washington's belief that Beijing is dumping goods on its markets.

Concluding a marathon round of bargaining that lasted more than 12 hours on Tuesday, Lutnick said China had pledged to speed up shipments of rare earth metals critical to U.S. auto and defense companies, while Washington would ease some of its own export controls — indicating progress had been made on two of the thorniest issues in bilateral relations.

The U.S. and Chinese delegations will take the proposals back to their respective leaders, according to China's chief trade negotiator Li Chenggang. The negotiations were "in-depth and candid," he told reporters in brief remarks before midnight outside Lancaster House, a Georgian-era mansion near Buckingham Palace that is hosting this week's meetings.

In additional comments on Wednesday, He Lifeng, the Chinese vice premier leading Beijing's delegation, called on the two countries to make use of their trade negotiation mechanisms to "enhance consensus, reduce misunderstandings and strengthen cooperation" after the talks, state broadcaster China Central Television reported.

Explainer: What's at Stake if the U.S.-China Trade War Drags On

Market reaction to the announcement was muted, with U.S. stock futures moving lower and the offshore yuan barely changing. China's benchmark onshore stock index rose 0.8% at the close, the most in nearly a month. European stocks were little changed.

"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 agree and enforce a deal."

China's Commerce Ministry did not respond to a request for comment. Foreign Ministry spokesman Lin Jian said he had no further information to provide. (alg)

Source: Bloomberg