U.S. and China Resume High-Stakes Trade Talks in London to Address Tariffs and Supply Chain Tensions

Senior officials from the United States and China convened today in London for critical trade negotiations aimed at de-escalating a contentious trade war that has disrupted global markets and supply chains. The talks, led by U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, follow a pivotal 90-minute phone call between President Donald Trump and Chinese President Xi Jinping last week, which restarted stalled discussions.

The negotiations focus on resolving disputes over tariffs, export controls, and critical supply chain issues, particularly China’s restrictions on rare earth magnets, which account for 90% of the global supply and are vital for industries ranging from automotive to defense. In April, China imposed export licenses on these materials, prompting the U.S. to suspend sales of technologies like jet engines and semiconductors to China. Both sides are seeking to stabilize the fragile truce established in Geneva on May 12, which temporarily reduced U.S. tariffs on Chinese goods from 145% to 30% and Chinese tariffs on U.S. imports from 125% to 10%.

“These talks are a critical step toward restoring stability in U.S.-China trade relations,” said U.S. Trade Representative Jamieson Greer. “Our priority is to ensure fair trade practices and secure reliable access to essential materials while protecting American businesses and workers.”

Tensions have escalated in recent weeks, with both nations accusing each other of violating the Geneva agreement. President Trump has publicly criticized China’s export curbs, while Beijing has pointed to U.S. restrictions, including visa revocations for Chinese students, as undermining the deal. The London talks aim to address these grievances and prevent further economic fallout, with National Economic Council Director Kevin Hassett expressing optimism about restoring rare earth shipments to pre-April levels.

The discussions also come amid broader global trade challenges. U.S. factories face shortages of rare earth magnets, impacting production in sectors like electric vehicles and defense, while China risks significant job losses if trade barriers persist. A Natixis report estimates that sustained U.S. tariffs could lead to up to six million manufacturing job losses in China, with a full-scale trade war potentially costing nine million.

President Trump, speaking after his call with President Xi, emphasized progress on rare earth issues and expressed confidence in reaching a resolution. “We’re straightening out some complex points, and I believe we’re moving toward a deal that benefits both sides,” he said during a recent Oval Office appearance.

The outcome of the London talks is expected to have far-reaching implications for global trade, consumer prices, and economic stability. Both delegations are under pressure to deliver results before the 90-day tariff truce expires in early August, with the world watching closely for signs of progress.