🇺🇸🇨🇳 US Says Trade Talks with China “Going Well” as Sides Reconvene in London

Top-level US officials describe the current round of trade negotiations underway in London as “going well,” signaling cautious optimism from both sides in a high-stakes economic diplomacy effort aimed at easing long-standing tensions.

🔍 1. Background & Why It Matters

After a preliminary agreement in Geneva last month, where both nations tentatively eased hefty tariffs in a 90‑day truce, attention shifted to contentious issues threatening deeper escalation. On June 10, US and Chinese delegations reconvened at Lancaster House to continue talks—led by Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer for the US, and Vice Premier He Lifeng alongside key economic ministers for China.

The two-day London session aimed to iron out sticking points: export controls on cutting-edge tech, US restrictions on semiconductor and aviation products, and China’s suspension of rare earth and magnet exports—critical components used in electric vehicles, consumer electronics, and military hardware.

🛠️ 2. Key Negotiation Stakes

• Upping Rare Earth Supply
  China restricts nearly 70–90% of global rare earth output. The US is pushing for more transparent and expanded export licensing to support global supply chains. Recent approvals suggest softening on Beijing’s stance.
• Targeted US Export Controls
  Washington is prepared to roll back some post-Geneva export curbs—especially around semiconductors and certain high-tech components—if China boosts rare earth exports. However, advanced Nvidia AI chips remain off-limits for now.
• Tariff and Market Signal Synchronization
  Trump’s prior sudden tariff hikes (dubbed “Liberation Day tariffs”) roiled markets and supply chains. The Geneva pause temporarily calmed markets; this London round is designed to build trust and signal longer-term stability. China’s rare earth move appeared partly coordinated with Geneva, supporting global investor sentiment.

🎙️ 3. Leaders’ Statements

• Howard Lutnick (Commerce Secretary):
  “Talks are going well … spending lots of time together” on day two.
• Kevin Hassett (NEC Chairman):
  The US is “ready to agree to lift export controls on some semiconductors in return for China speeding up delivery of rare earths and magnets,” with clear carve-outs for “very high-end Nvidia stuff”.
• Former President Trump (speaking June 9):
  Reported “only received good signals” from the talks, noting they were “going well” but reminding everyone “China is not easy to deal with”.

📈 4. Economic & Market Response

• China’s Exports to US fell 34.5% in May—the steepest drop since the COVID‑19 lockdown era.
• Global Markets rebounded somewhat after Geneva, with Hong Kong equities entering a bull phase and the S&P 500 nearing record highs.
• Analysts caution that a full de-escalation will require sustained deliverables from these London discussions.

⏳ 5. What’s Next?

• Negotiations resumed the morning of June 10, with more in-depth talks planned.
• No concrete deals may emerge immediately, but both delegations aim to maintain momentum before the Geneva truce expires.
• Watch for adjustments in export licensing, especially semiconductors and rare earths.
• A summit-level follow‑up—perhaps between Trump and Xi—is likely if this round maintains smooth progress.

✅ Summary

The current London trade talks are an essential next step following Geneva’s tentative truce. Both sides are probing concessions—China with rare earth licensing, the US with tech export rollbacks—while maintaining strategic red lines. Today’s session will reveal whether this cautious optimism can solidify into a tangible framework or serve merely as another diplomatic pause