London – A fresh round of trade negotiations between the United States and China is set to begin in London on Monday, aiming to ease tensions that have rattled the global economy for over a year.
The talks will bring together senior US officials, including Commerce Secretary Howard Lutnick, and key Chinese representatives such as Vice Premier He Lifeng. The agenda is expected to focus on sensitive issues like China’s export controls on rare earth metals vital components for modern technology and Beijing’s access to American products like computer chips.
Last month, Washington and Beijing reached a temporary truce, rolling back some tariffs after months of escalating trade hostilities. Yet both sides have since accused the other of violating the agreement.
President Donald Trump described his recent phone call with Chinese President Xi Jinping as a “very good talk,” with the first direct communication since the trade war began earlier this year. “It resulted in a very positive conclusion for both countries,” Trump said.
However, Chinese state media reported that Xi called on the US to withdraw “negative measures” against China, a clear reference to tariffs and export restrictions.
The dispute centres on more than just tariffs. China controls roughly 69% of the world’s rare earth mineral supply, materials essential for everything from smartphones to electric vehicles. The US, in response, has tightened export controls on semiconductors and advanced technologies, citing national security concerns.
Swetha Ramachandran, a fund manager at Artemis, welcomed Lutnick’s involvement in the talks. “He’s behind some of the very strict export controls on technology to China,” she told BBC Radio’s Today programme. “Rare earths are a key issue. There’s a lot at stake here for both countries, so there’s room for compromise.”
Joining Lutnick will be US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer. The talks follow months of tit-for-tat tariffs, which peaked at 145% on certain goods.
In May, negotiations in Switzerland led to a truce described by Trump as a “total reset.” The US lowered tariffs on Chinese imports to 30%, while China reduced levies on American goods to 10%. Both sides agreed to a 90-day deadline to hammer out a broader deal.
Yet cracks quickly appeared. Greer claimed China had not eased restrictions on rare earth magnet exports as promised. Beijing, for its part, accused the US of breaching the deal by limiting sales of chip design software, banning Huawei-related products, and restricting visas for Chinese students.
Over the weekend, China’s Ministry of Commerce announced it had approved some rare earth export licences but offered no details on recipients. Trump has said Xi agreed to restart rare earth shipments, but White House economic adviser Kevin Hassett told CBS News exports remain below expectations.
The ongoing dispute has cast a shadow over the global economy. The Organisation for Economic Co-operation and Development recently downgraded its growth forecast to 2.9%, citing “significant” trade barriers and warning of widespread economic weakness.
New data from Beijing showed Chinese exports rose 4.8% in May year-on-year slower than expected while imports fell 3.4%, deepening concerns about global demand.
As the two economic giants prepare to meet again, hopes rest on finding a middle ground to halt further damage. But with both sides guarding their interests fiercely, the path ahead remains uncertain.
