U.S.-China meet in London as trade talks resume amid export slump
United States and China hold new trade talks after 34.5% drop in Chinese exports to U.S. and rare earth dispute.
High-level U.S. and Chinese diplomats will have talks in London on Monday in a new effort to mitigate trade tensions between the world’s two largest economies. The new talks come as China reported a 34.5% year-on-year decline in exports to the U.S. in May - representing the largest drop since the early days of the COVID-19 pandemic.
While the U.K. is acting as the host, they are not part of the negotiations. The time and location of the meeting remains undisclosed. A spokesperson from the British government said, “We are a country of free trade and have always been clear that trade wars are not in anybody’s interest, so we welcome these discussions.”
Rare earth minerals and tariffs at the center
The talks were preceded by a phone call between the President of the United States, Donald Trump, and the President of the People's Republic of China, Xi Jinping - their first talks since Trump took office again. Trump described the 90-minute call as "very positive," claiming Xi agreed to ships exports of rare earth materials and magnets - essential materials to a stretch of industries, including electronics and automotive manufacturing - after announcing restrictions on exports weeks earlier from China.
Trade representatives from both before met recently in Geneva and came to the team's original agreement to suspend most of the mutual tariffs, which had mushroomed upward to nearly 145%. However, in the last couple weeks both sides have been making renewed allegations of violations and noncompliance, which have resulted in a renewed round of talks designed to provide clarity and stabilize the process.
High-level delegations signal urgency
The U.S. delegation in London comprises Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and U.S. Trade Representative Jamieson Greer. The Chinese delegation is led by Vice Premier He Lifeng. All four officials attended the Geneva meetings last month, a strong indication of the seriousness and continuity of the negotiations.
Asian markets reacted positively in the lead up to the meetings, as stocks across the region rose on Monday. The outcome will be significant for global supply chains and investor sentiment, especially given the persistent uncertainties around rare earth supply and volatile trade relations.
