In London, senior officials from the United States and China gathered on Monday to reinforce a delicate ceasefire in their ongoing trade conflict, a situation that has caused considerable turbulence in the global economy. The discussions took place at the elegant Lancaster House, with the Chinese delegation led by Vice Premier He Lifeng. He met with key U.S. figures such as Commerce Secretary Howard Lutnick, Treasury Secretary Scott Bessent, and Trade Representative Jamieson Greer. Included in Beijing’s delegation was Wang Wentao, China’s commerce minister.
These discussions are a follow-up to the prior negotiations held in Geneva the preceding month, which temporarily alleviated the trade tensions. It was on May 12 that both nations agreed on a 90-day pause, halting most of the tariffs exceeding 100% that they had unleashed in a growing trade dispute, which heightened fears of a recession. As the two dominant global economies, the U.S. and China’s trade relations are pivotal. Recent Chinese trade statistics reveal a 35% decrease in exports to the United States in May compared to the previous year.
Despite the Geneva understanding, a series of contentious exchanges between the two countries have persisted. The disputes involve key issues such as advanced semiconductors crucial for artificial intelligence, visas for Chinese students attending American educational institutions, and “rare earth” minerals that are essential for car manufacturing and other industrial sectors. Last Thursday, President Donald Trump and Chinese President Xi Jinping engaged in an extensive telephone conversation, attempting to realign their relationship. Trump later declared on social media that the trade discussions were set to continue in London.
Topics related to rare earths were anticipated to be central to these meetings. In April, China instated a policy requiring licenses for the export of seven rare earth elements, triggering global concerns in the automotive industry about potential production halts as stockpiles dwindled. However, Beijing hinted over the weekend that they are working to remedy the situation, responding to issues raised by both European and American companies. On Monday, Kevin Hassett, a U.S. economic adviser, expressed optimism, expecting a brief meeting marked by a “big, strong handshake” regarding rare earths.
Although the UK government hosted the venue and provided logistics for the talks, it did not directly participate. However, British officials like Treasury chief Rachel Reeves and Business Secretary Jonathan Reynolds engaged with the delegations. The British government released a statement supporting the dialogue, emphasizing the importance of free trade and the global benefits of avoiding trade wars.