Top officials from US and Chinese began high-stakes trade talks in London on Monday, seeking to defuse a deepening dispute over rare earth exports and broader economic tensions that threaten global supply chains and growth.
The high-level talks, hosted at the historic Lancaster House, marked the first of what are expected to be two days of negotiations. They aim to reaffirm a preliminary agreement reached last month in Geneva, which had briefly cooled tensions between the two economic superpowers.
However, since the Geneva accord, Washington has accused Beijing of failing to uphold its commitments—particularly in relation to shipments of rare earth minerals, which are vital to industries including electric vehicles, semiconductors and defence.
“The purpose of the meeting today is to make sure that they’re serious, but to literally get handshakes,” said White House economic adviser Kevin Hassett, “We want a handshake from China on rare earths,” he added, noting that US President Donald Trump had secured a verbal commitment from President Xi Jinping in a rare phone call last week. “We expect export controls to be eased and rare earths released in volume immediately afterwards.”
The talks come at a pivotal moment for both nations, as the economic impact of renewed trade tensions becomes increasingly visible. Chinese customs data showed that exports to the US plunged 34.5% year-on-year in May—the steepest drop since February 2020 at the onset of the COVID-19 pandemic.
In the US, surging imports ahead of anticipated tariffs have led to a contraction in first-quarter GDP and shaken consumer and business confidence.
Despite these strains, inflation has remained relatively stable, and the jobs market continues to show resilience. Still, economists warn that deeper economic cracks may emerge over the summer if tensions remain unresolved.
Among those attending the London meetings are US Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and US Trade Representative Jamieson Greer. China’s delegation is led by Vice Premier He Lifeng. Lutnick’s participation—absent from the Geneva talks—is particularly notable given his agency’s oversight of export controls and the central role rare earths now play in the dispute.
China currently dominates the global supply of rare earth magnets, a key component in electric vehicle motors and military technologies.
Beijing’s April decision to suspend exports of several critical minerals sent shockwaves through industries reliant on these inputs, from automotive and aerospace to high-tech manufacturing.
The renewed dialogue follows a more than one-hour phone call between Trump and Xi four days earlier—their first direct conversation since Trump’s return to the White House in January. According to a Chinese government summary, Xi urged Trump to de-escalate trade measures and refrain from provocations over Taiwan. Trump, meanwhile, described the call on social media as having led to “a very positive conclusion,” paving the way for the London meeting.
Following the call, Trump announced that Xi had agreed to resume rare earth shipments to the US. Reuters later reported that China had granted temporary export licences to suppliers serving the top three US automakers.
White House spokeswoman Karoline Leavitt said that the US is looking to build on the Geneva progress with the hope of launching broader and more comprehensive trade negotiations.
The Geneva accord had sparked a global market rally, with US stock indexes recovering sharply from near-bear market levels. Yet analysts remain cautious.
“Everyone around Trump is still hawkish, and so a breakthrough US-China trade deal is unlikely, especially in the context of other deals that are further along and prioritised,” said Ian Bremmer, president of the Eurasia Group.
“A temporary truce is possible, but there’s little chance for a truly constructive relationship amid ongoing decoupling trends and continued US pressure on allies to shift supply chains away from China.”
Boluwatife Enome
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