Top US and Chinese officials are meeting in London in a bid to defuse trade tensions over rare earth minerals and advanced technology after a phone call between Presidents Donald Trump and Xi Jinping last week.
The two sides are aiming in Monday’s talks to build on a preliminary trade deal struck in Geneva in May, which briefly lowered the temperature between Washington and Beijing and offered relief for investors battered by months of Trump’s global trade war.
Since then, the agreement to mutually suspend most of the 100 percent-plus tariffs for 90 days has been followed by barbs and accusations from both sides.
But after reaching a tentative understanding with Xi on resuming the flow of critical minerals, Trump said on Thursday that he expected Monday’s meeting to go “very well”.
Who is leading the US and Chinese delegations?
The US delegation in London is headed by Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer. The Chinese contingent will be led by Vice Premier He Lifeng.
The venue of the meeting has not been disclosed.
What happened during last week’s call between Xi and Trump?
Monday’s meeting comes four days after Trump and Xi spoke by phone, their first direct interaction since Trump’s January 20 inauguration.
After the more than hourlong call on Thursday, Trump said the conversation was focused on trade and had resulted in a “very positive conclusion” for both countries.
In the first readout of the call, Trump posted on his social media site, Truth Social: “I just concluded a very good phone call with President Xi, of China, discussing some of the intricacies of our recently made, and agreed to, Trade Deal.”
“There should no longer be any questions respecting the complexity of Rare Earth products. Our respective teams will be meeting shortly at a location to be determined. During the conversation, President Xi graciously invited the First Lady and me to visit China, and I reciprocated,” he added.
For his part, Xi was quoted by Chinese state TV as saying after the call that the two countries should strive for a win-win outcome and dialogue and cooperation are the only right choice for both.
In recent weeks, both sides have accused the other of breaching their deal made in Geneva and aimed at dramatically reducing tariffs – an agreement Trump touted as a “total reset” after he announced tariffs on all US trading partners on April 2.
The tentative truce struck on May 11 in Geneva brought US tariffs on Chinese products down from 145 to 30 percent while Beijing slashed levies on US imports from 125 to 10 percent.
The agreement gave both sides a three-month deadline to try to reach a more lasting deal.
In what ways have US export controls played a role?
Renewed tensions between the US and China began just one day after the May 12 announcement of the Geneva agreement to temporarily lower tariffs.
The US Department of Commerce issued guidance saying the use of Ascend artificial intelligence chips from Huawei, a leading Chinese tech company, could violate US export controls.
The agency warned companies “anywhere in the world” against using AI chips made by Huawei, claiming they illegally contained, or were made with, US technology.
Beijing publicly criticised Washington’s move to limit access to American technology, accusing the US of trying to stymie China’s ability to develop cutting-edge AI chips.
On May 15, Chinese Ministry of Commerce spokesperson He Yongqian accused the US of “abusing export control measures”, adding that China would take steps to defend its business interests.
Lutnick wasn’t in Geneva last month, but he is a lead negotiator in Monday’s talks in London. His Commerce Department oversees export controls for the US, and some analysts believe his participation is an indication of how central the issue has become for both sides.
China issuing rare earth licences to US companies
In response to Trump’s April 2 tariff announcement, Beijing suspended exports to all countries of six heavy rare earth metals and associated magnets on April 4.
The move upended global supply chains central to automakers, aerospace manufacturers and military contractors.
China produces 90 percent of the world’s rare earth minerals, which are essential components in permanent magnets – used in a swath of high-tech applications.
Without mentioning rare earths specifically, Trump took to social media last month to attack China’s trade restrictions.
“The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US,” Trump posted on Truth Social on May 30.
After Xi and Trump’s phone call last week, however, the Chinese government hinted that it is addressing US concerns, which have also been echoed by some European companies.
On Saturday, China’s Commerce Ministry said it had approved some rare earth exports, without specifying which countries were involved.
It issued a statement saying it had granted some approvals and “will continue to strengthen the approval of applications that comply with regulations”.
On Monday, the rare earth suppliers of three big US automakers – General Motors, Ford and Stellantis – got clearance from Beijing for a handful of export licences.
Washington wants access to as many rare earths as quickly as possible, Kevin Hassett, head of the National Economic Council at the White House, said on the CBS TV network’s Face the Nation programme on Sunday.
“We want the rare earths, the magnets that are crucial for cellphones and everything else to flow just as they did before the beginning of April, and we don’t want any technical details slowing that down,” Hassett said.
What challenges remain?
Student visas don’t normally figure in trade talks, but a recent US announcement that it would begin revoking the visas of Chinese students has emerged as another flashpoint between Washington and Beijing.
On May 28, US Secretary of State Marco Rubio said the Trump administration would begin to “aggressively” revoke the visas of Chinese university students.
He also said the US would revise visa criteria to enhance scrutiny of all future visa applications from China and Hong Kong.
China is the second largest country of origin for international students in the US after India.
More than 270,000 Chinese students studied in the US in the 2023-2024 academic year.
Beijing’s Ministry of Foreign Affairs spokesperson Mao Ning criticised Washington’s decision to revoke the visas, saying it “damaged” the rights of Chinese students.
Other concerns continue to strain the bilateral relationship from the illicit fentanyl trade to the status of democratically governed Taiwan and US complaints about China’s state-dominated economic model.
Still, Trump’s geopolitical bluster goes well beyond China. While promising to reshape relationships with all US trading partners, Trump so far has reached only one new trade agreement – with the United Kingdom.
