A new round of trade talks between the US and China will take place in London on Monday. US President Donald Trump announced on Friday that a senior US delegation will meet Chinese officials. Beijing confirmed that Vice Premier He Lifeng will attend the discussions. This development follows a recent phone call between Trump and China’s leader Xi Jinping, which Trump described as a "very good talk."
Background of the Trade Conflict
Last month, the US and China agreed to a temporary truce to reduce import taxes on traded goods. However, both countries have since accused each other of breaking the deal. The trade war began in February when Trump imposed tariffs on imports from several countries, hitting China the hardest. Beijing responded with its own tariffs on US goods, leading to tit-for-tat increases that peaked at 145%.
Key Participants in the Talks
Trump announced that Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer will attend the London talks. China’s foreign ministry said Vice Premier He would be in the UK from June 8 to 13 for the "China-US economic and trade mechanism" meeting.
Positive Signals and Remaining Tensions
Trump said his phone call with Xi focused mainly on trade and led to "a very positive conclusion for both countries." However, Chinese state media reported that Xi urged the US to "withdraw the negative measures it has taken against China." This call was the first between the two leaders since the trade war began.
May’s Temporary Truce and Its Terms
In May, talks in Switzerland led to a truce that Trump called a "total reset." The deal lowered US tariffs on Chinese products to 30%, while China cut levies on US imports to 10%. China also promised to ease restrictions on critical mineral exports. Meanwhile, the US suspended some technology sales, including semiconductors, and China restricted exports of rare earth minerals and magnets.
The Importance of Rare Earth Minerals
Swetha Ramachandran, a fund manager at Artemis, highlighted the importance of rare earth minerals. China controls 69% of the global supply, essential for US technology development. She welcomed the inclusion of Commerce Secretary Lutnick in the talks, noting his role in technology export controls. She believes the rare earth issue could help both sides find common ground.
Current Economic Data and Worsening Relations
Recent data from Beijing showed China’s exports rose by 4.8% in May compared to last year, but imports fell by 3.4%, worse than expected. Since then, tensions have grown. Trump accused China of "totally violating its agreement," while China claimed the US "severely violated" the deal.
Disputes Over Critical Minerals
The US criticized China for failing to restart shipments of critical minerals and rare earth magnets vital for car and computer industries. China’s Ministry of Commerce said it approved some rare earth export licenses but did not specify which countries were involved. This followed Trump’s claim that Xi agreed to resume rare earth trade.
Ongoing Challenges and Outlook
White House Economic Council Director Kevin Hassett said on CBS News that exports of critical minerals are increasing but still fall short of the Geneva agreement levels. As the US and China prepare for talks in London, many hope for progress to ease tensions and avoid further trade conflict escalation.