High-stakes trade negotiations have kicked off today in London between the United States and China, aiming to build on a preliminary agreement made in Geneva last month and address escalating tariffs and strategic tensions over key commodities.
Senior U.S. officials—including Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer—are leading the American delegation. They are meeting their Chinese counterparts, likely led by Vice Premier He Lifeng, to negotiate a path forward for a fragile truce that includes a 90-day pause on most tariffs.
The London dialogue comes on the heels of a productive ’signal call’ between Presidents Donald Trump and Xi Jinping, with Trump describing the 90-minute exchange as positive and expressing confidence that the London talks “should go very well”. This followed a Geneva deal announced on 12 May, which temporarily reduced U.S. tariffs to around 30% and Chinese retaliatory tariffs to 10%, while establishing a 90-day window to reach more durable agreements.
The agenda in London spans crucial issues: reinstating China’s export of rare earth minerals—critical for high-tech and defense industries—controlling export restrictions on advanced semiconductors, and facilitating student and business visas.
The U.S. delegation is expected to press China for concrete high-volume shipments of rare earths following earlier delays.
Global markets reacted cautiously yet optimistically to the London talks. U.S. futures recorded modest declines, while Asian markets, including China’s, opened higher. In particular, Hong Kong’s Hang Seng index jumped 1.4%, supported by stronger U.S. job data.
In the U.S., the Dow, Nasdaq, and S&P 500 showed mixed movement, reflecting investor hopes that eased insistence on tariffs could help avert an economic slowdown.
However, experts warn that while the London meeting is significant, it may fall short of systemic reforms. Analysts predict the outcome could involve interim measures like limited tariff rollbacks and increased Chinese purchases of U.S. goods—rather than sweeping structural changes.
Further complicating the backdrop, the U.S. remains wary of Chinese investments in strategic areas, with Secretary Biden’s administration cautioning the U.K. over a proposed Chinese embassy near the City of London for security reasons.
Markets and governments will monitor today’s discussions closely. Key economic indicators due midweek, including U.S. inflation reports and producer price data, could influence negotiators and markets alike. Meanwhile, the London talks aim to ensure that the truce—due to expire in mid-August—can be extended or replaced with a sustainable framework.
As the U.S. delegation seeks a “strong handshake” on rare earth exports, observers caution that any faltering could diminish investor confidence. The trade negotiations will also assess whether the Geneva timeline can be adhered to or if more negotiations will be needed.
The London round may not settle the deep-seated trade rift, but it represents a crucial next step in balancing economic leverage, supply chain security, and geopolitical dynamics.
