London (TDI): Senior officials from the United States and China convened in London on Monday in a renewed effort to defuse mounting trade tensions that have expanded beyond tariffs into critical areas like rare earth minerals vital to global supply chains and manufacturing.
The talks, taking place at Lancaster House, mark the latest attempt to revive momentum following a tentative agreement reached in Geneva last month, Reuters reported.
That accord had temporarily eased tensions, but disputes have since reignited, especially over China’s restrictions on rare earth exports.
Washington is pressing for immediate action, specifically for China to ease its export controls and resume large-scale shipments of rare earth elements, which are essential for the production of electric vehicles, electronics, and military hardware.
Both economies are feeling the pressure from the ongoing trade conflict. According to a recent report from Chinese customs, a year-on-year fall of 34.5% in exports to the United States in May represented the largest drop recorded since the COVID-19 pandemic days. The US economy has also been showing some weakness as GDP declined in the first quarter when businesses hurried to import goods in anticipation of a rise in prices.
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Consumer and business confidence have taken a hit, though inflation remains relatively stable and the job market is holding up for now.
Key US figures attending the talks include Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer. China’s delegation is led by Vice Premier He Lifeng. Notably, Lutnick’s presence underscores the importance of the rare earths issue, given his role in overseeing export regulations.
These London talks follow last week’s direct conversation between Trump and Xi, their first since Trump’s return to office in January. While China’s official summary emphasized concerns over US policy on Taiwan and its broader trade posture, Trump framed the exchange as productive and said it laid the groundwork for renewed cooperation.
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Shortly after the call, the US reported that China had begun issuing temporary export licenses for rare earth materials bound for major American automakers. The earlier decision by Beijing to suspend exports in April had severely disrupted supply chains tied to industries ranging from aerospace to semiconductors.
Markets have responded favorably to signs of easing tension. The Geneva deal helped spark a global stock rebound, with major US indices recovering from bear-market territory.
