Top officials from the United States and China have gathered in central London this week in a renewed attempt to resolve escalating trade tensions that have rattled global markets and threatened economic growth.
US Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent are leading the American delegation at Lancaster House, where they are meeting Chinese Vice Premier He Lifeng and other senior officials. The discussions mark the most significant talks since a temporary truce was struck in May in Switzerland.
Central to the agenda are disputes over rare earth exports from China and American restrictions on advanced technology sales to Beijing. The US accuses China of delaying shipments of key minerals used in electronics and electric vehicles. In return, Beijing says Washington has unfairly limited access to semiconductors and software critical to artificial intelligence development.
The current standoff stems from earlier tariff battles that began when President Donald Trump introduced sweeping import duties. China retaliated, sparking tit-for-tat hikes that reached a peak of 145 percent. Although both sides agreed to lower tariffs temporarily, they now accuse each other of violating the terms of that agreement.
US National Economic Council Director Kevin Hassett said on Monday he expects a brief but productive round of talks. “We’re hopeful that once we shake hands, export controls will be eased and China will resume large-scale rare earth shipments,” he told CNBC.
Lutnick’s presence signals Washington’s serious stance on safeguarding high-tech industries. He has played a key role in crafting the current export restrictions. Meanwhile, fund manager Swetha Ramachandran told the BBC that rare earths remain a strong bargaining chip, given China’s control of nearly 70 percent of the global supply.
Trade Representative Jamieson Greer, also attending the London talks, criticized Beijing for not lifting restrictions on rare earth magnets. China, in turn, claims the US is blocking software sales and revoking student visas, undermining cooperation.
Beijing confirmed over the weekend that it had approved some export licenses for rare earth materials but provided few details.
Separately, Vice Premier He met UK Chancellor Rachel Reeves to discuss deeper economic collaboration. The meeting comes as China plans to build a new embassy near London’s financial center, a project that has raised US concerns over national security.
The stakes remain high. Without a deal by July 9, British steel exports to the US could face steep tariffs, and further disruption to global supply chains looms. Meanwhile, new trade data from China revealed weaker-than-expected exports and a significant drop in imports, reflecting mounting pressure on the world’s second-largest economy.
The Organization for Economic Co-operation and Development has lowered its global growth forecast to 2.9 percent, blaming rising protectionism and prolonged trade friction.
As negotiations continue behind closed doors, officials on both sides are under mounting pressure to strike a lasting deal before the truce expires.
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