The United States and China have resumed high-stakes trade negotiations in London on Monday, in a renewed effort to stabilize economic ties after months of tariff-fueled hostilities. The meeting marks the second round of talks following an earlier session in Geneva last month.
The talks, hosted at the historic Lancaster House, are being led by Chinese Vice Premier He Lifeng, while the American delegation includes Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer. US President Donald Trump expressed optimism ahead of the talks, calling them likely to go “very well.”
Chinese state news agency Xinhua confirmed the opening of discussions, which come just days after Trump and Chinese President Xi Jinping held their first direct talks since Trump’s return to the White House.
Rare Earths, Tech Restrictions at the Heart of the Dispute
A major sticking point remains China’s exports of rare earth elements, essential in high-tech industries such as EV batteries and defense systems. Since the imposition of Trump’s “Liberation Day” tariffs in April, shipments of these critical minerals have slowed significantly.
The US is pressing Beijing to restore rare earth exports, while China is demanding concessions on immigration restrictions, advanced technology access, and market entry for Chinese tech firms.
Trade expert Kathleen Brooks noted, “China wants the US to ease chip restrictions and reconsider policies affecting Chinese students and companies.”
The dispute escalated in April when the US slapped an additional 145% tariff on Chinese goods, prompting China to retaliate with 125% tariffs on American products. A temporary truce was struck in Geneva, allowing for a 90-day rollback of tariffs, but deep divisions remain.
Diplomatic Ripples: Allies and Alternatives
Parallel to US talks, China has ramped up diplomatic engagement with other nations. Discussions with Japan, South Korea, and Canada have gained traction, while Beijing is pushing to open a “green channel” for rare earth exports to the European Union ahead of a July EU-China summit celebrating 50 years of diplomatic ties.
UK authorities, while not participating, have welcomed the talks, reiterating their support for free trade. “A trade war is in nobody’s interest,” said a UK Foreign Office spokesperson.
Trade Data Reflects Tensions
China’s latest export figures reflect the impact of the trade war. Exports to the US fell by 12.7% in May, dropping from $33 billion in April to $28.8 billion, as per official data.
Despite small signs of diplomatic warming, including China’s outreach to Canada, the London talks are pivotal. Whether they lead to a new understanding or fuel further confrontation remains to be seen.
