A new round of trade negotiations between the United States and China will begin in London on Monday. These talks are an effort to maintain the fragile truce established last month. The talks are seen as a significant step toward easing tensions following a phone call between US President Donald Trump and Chinese President Xi Jinping.
In May, the two countries agreed to reduce tariffs on certain goods for a period of 90 days, creating an optimistic atmosphere.
However, this optimism quickly diminished due to critical issues such as China’s control over rare earth elements and the US’s access to semiconductor technologies. Rare Earth Elements on the Agenda Exports of rare earth elements, vital for electronics, automotive, and defense systems, will be one of the key topics of discussion in London. Experts believe Beijing is unlikely to relinquish its dominance in this strategic area.Morgan Stanley’s chief China economist, Robin Xing, stated, “China’s control over the rare earth elements supply chain remains a significant bargaining chip in negotiations.”
Since the initial agreement in Geneva, President Trump has accused China of slowing rare earth exports. In response, the US has imposed new restrictions on semiconductor chips and threatened to revoke US visas for Chinese students.
China retaliated by accusing the US of not keeping its promises.Leaders Meet in London
US Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer will participate in the London talks. The Chinese side will be led by Vice Premier He Lifeng. Meanwhile, the Chinese Ministry of Commerce gave positive signals by announcing that it had approved a certain number of export licenses. Rare Earth Exports in Focus In April, China introduced new regulations for the export of rare earth elements, requiring exporters to document their intended use and obtain licenses. The Trump administration expected these restrictions to be lifted along with the ceasefire; However, China’s slow pace of issuing export approvals has raised concerns in Washington. The US wants to restart the flow of rare earth elements. National Economic Council Chairman Kevin Hassett stated that exports have increased but have not yet reached the levels agreed upon in Geneva. China’s Armor and Economic Problems China’s Dominance over Rare Earths constitutes a major bargaining chip in negotiations. According to experts, Beijing may try to use this advantage to persuade the US to ease its restrictions on semiconductor technologies. However, the Chinese economy faces serious challenges domestically. Exports increased by only 4.8% in May, well below the 8.1% growth in April. Exports to the US saw a sharp decline of 34.5%. At the same time, deflationary pressures are increasing in China. In May, the Consumer Price Index (CPI) fell by 0.1% year-on-year. The Producer Price Index (PPI) fell by 3.3%, experiencing its biggest drop in 22 months. Despite all these challenges, the Chinese Customs Spokesperson emphasized the country’s “resilience to external pressures.” Separator Despite all these challenges, the Chinese Customs Spokesperson emphasized the country’s “resilience to external pressures.” Separator
