New Round of Trade Negotiations Begins in London
High-level trade discussions between the United States and China have resumed in central London, with a focus on resolving key economic disputes. US Commerce Secretary Howard Lutnick and Chinese Vice Premier He Lifeng are leading the talks at Lancaster House, aiming to reduce tensions that have strained global economic growth.
Key Focus: Rare Earths and Semiconductor Access
Among the top agenda items are Chinese rare earth exports—critical for the tech industry—and China’s access to US semiconductor technologies. Washington accuses Beijing of limiting rare earth shipments, while Beijing criticizes US export bans on AI-linked technologies and chip design software.
The US says rare earth magnets, vital for smartphones and electric vehicles, are being withheld. In turn, China has raised concerns over blocked access to semiconductors and the restrictions on Huawei, as well as cancelled student visas.
A Diplomatic Reset After Tariff Truce
Last month, both sides agreed to a temporary truce. US tariffs on Chinese goods were cut to 30%, while China reduced its import levies to 10%. But each side now accuses the other of violating non-tariff commitments.
The London talks follow a phone call between President Donald Trump and President Xi Jinping, which Trump described as a “very good talk.” Xi reportedly urged the US to remove “negative measures.”
US Signals Willingness to Ease Export Controls
US economic adviser Kevin Hassett said that if progress is made, export controls could be loosened immediately, and China may resume rare earth shipments in larger volumes. Still, Washington plans to maintain curbs on advanced chips for national security reasons.
According to Swetha Ramachandran, a fund manager at Artemis, China dominates the global production of rare earths, mining over 69% of global supply. “There’s enough leverage here for both parties to claim wins,” she said.
New Embassy Plans Raise UK Security Concerns
As Vice Premier He also met UK Chancellor Rachel Reeves, China’s plan to build a new embassy at Royal Mint Court near the City of London raised US concerns about its proximity to financial infrastructure.
Simultaneously, the UK and US are finalizing a steel tariff agreement before a 9 July deadline to avoid higher duties on British steel exports.
Global Growth Threatened by Trade Policies
Economists warn that prolonged trade disputes risk damaging the global economy. The OECD now forecasts global growth at just 2.9%, citing increased trade barriers and broader economic uncertainty.
Meanwhile, new data shows China’s exports in May rose by 4.8%, while imports fell by 3.4%, a sharper drop than analysts had forecast, signaling ongoing trade strain.
