After weeks of tension, the United States and China have decided to restart trade talks. These discussions began in London on Monday. US President Donald Trump made the announcement on Friday. Soon after, China confirmed that Vice Premier He Lifeng would attend the talks.
Earlier last week, Trump and Chinese President Xi Jinping spoke on the phone. According to Trump, it was a “very good talk” that ended positively for both sides.
Top Officials Meet in London
As a result of the call, Trump said key US officials would lead the negotiations. Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer are meeting their Chinese counterparts in London.
Meanwhile, Beijing stated that Vice Premier He would be in the UK from June 8 to 13. During this visit, both sides are holding meetings under the “China-US economic and trade mechanism.”
Truce Under Pressure
Previously, both nations agreed on a temporary truce in May. This agreement reduced tariffs. The US cut duties on Chinese goods to 30%, while China lowered tariffs on US products to 10%. China also promised to ease restrictions on critical minerals.
However, the peace didn’t last. Since then, both countries have blamed each other for breaking the agreement. Trump said, “China had totally violated its agreement with us.” In response, China accused the US of “severely violating” the deal.
Key Disagreements Continue
Importantly, both countries are still clashing over rare earth minerals. These materials are vital to industries like electronics and defense. The US had earlier blocked sales of semiconductors and other tech to China. China retaliated by restricting exports of rare earths.
Notably, China produces 69% of the world’s rare earths. Therefore, this gives Beijing significant control over global supply chains.
Swetha Ramachandran, a fund manager at Artemis, explained on the BBC’s Today programme, “Some of the focus certainly seems to be on rare earths where China, of course, has dominance in terms of producing.”
China Allows Limited Exports
On Saturday, the Chinese Ministry of Commerce said it had approved some export applications for rare earths. However, it didn’t mention which countries were included. The statement followed Trump’s claim that Xi agreed to restart rare earth trade.
Yet, on Sunday, White House economic adviser Kevin Hassett offered a cautious view. He said, “Those exports of critical minerals have been getting released at a rate that is, you know, higher than it was, but not as high as we believe we agreed to in Geneva.”
Trade War Timeline
The trade conflict began earlier this year. Trump had announced major tariffs on several countries, especially China. In return, Beijing increased its own tariffs on US goods. This back-and-forth reached a peak with 145% tariffs on some products.
Later in May, both sides met in Switzerland. That meeting led to the current 90-day window to finalize a new deal. Trump had called it a “total reset.”
China’s Trade Numbers Worry Markets
Meanwhile, China’s latest trade data raised concerns. According to new figures released on Monday, exports grew by only 4.8% in May. At the same time, imports dropped 3.4%, far worse than the 0.9% analysts had predicted.
As a result, pressure has increased on both sides to find a solution before the 90-day deadline ends.
What’s Next?
Clearly, the stakes are high. These London talks may decide whether the world’s two biggest economies can resolve their trade differences—or fall back into conflict.
