The United States and China are set to resume formal trade negotiations in London on Monday, signaling renewed efforts to de-escalate tensions over rare-earth minerals, advanced technologies, and tariff frameworks that have weighed on global economic sentiment.
The high-level talks follow a recent phone call between former US President Donald Trump and Chinese President Xi Jinping, where both leaders expressed a willingness to resume stalled discussions.
The London meeting is expected to revive the provisional Geneva agreement reached in May, which aimed to temporarily lower tariffs that had risen to over 100% in some sectors.
Leading the US delegation are Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and US Trade Representative Jamieson Greer. China will be represented by Vice Premier He Lifeng and senior officials from the Ministry of Commerce.
The inclusion of Commerce Secretary Lutnick, who oversees technology export controls, is seen as a key signal that Washington is prepared to re-evaluate restrictions on Chinese access to certain American technologies.
The Geneva deal had initially calmed markets, offering a framework to suspend tariff escalations and reopen flows of critical exports, including rare-earth magnets essential to the US defense and electric vehicle sectors.
However, implementation stalled amid mutual accusations of backpedaling on commitments. US officials have since cited a sharp drop in shipments of rare-earth minerals, while Beijing criticized continued restrictions on artificial intelligence chips and related technologies.
China’s approval on Saturday of certain rare-earth export applications marked a limited but symbolic step toward compromise. However, Beijing did not disclose the industries or destinations affected, leaving room for speculation on the scope and intent of the action.
“We want the rare earths and the magnets that are crucial for smartphones and everything else to flow just as they did before April,” said Kevin Hassett, head of the US National Economic Council, during an interview on CBS’s Face the Nation. “And that’s clear to them.”
Both sides are expected to address unresolved issues from the Geneva framework, particularly surrounding licensing and permission structures for critical goods and services. Analysts say the ambiguity of the earlier agreement led to misinterpretations and slowed follow-up efforts.
“They left too many things open to interpretation, and they all paid the price in the intervening weeks,” said Josh Lipsky, chair of international economics at the Atlantic Council. “This round is more about codifying what was discussed in Geneva and identifying precisely what’s permitted and what isn’t.”
Investor sentiment remains cautious. Despite renewed diplomatic overtures, market analysts warn that meaningful outcomes may be limited given the complexity of issues on the table. These include dual-use technology controls, student visa restrictions, intellectual property protections, and tariff thresholds.
Trump, who last week described the Geneva understanding as “a good start,” stated he expects the London talks to go “very well” and reaffirmed his desire to maintain open academic exchange with China, noting his “honor” in welcoming Chinese students to the US.
Meanwhile, China faces economic headwinds that may encourage compromise, including persistent deflation, youth unemployment, and weak domestic consumption. A commentary published by the state-run Xinhua News Agency criticized Washington for framing economic cooperation as a national security issue, calling such thinking the “biggest obstacle to win-win cooperation.”
Nonetheless, the commentary noted the long-term strategic alignment between the two countries, stating that “China and the US share extensive common interests and broad space for cooperation.”
Trump’s temporary suspension of US tariffs on Chinese goods expires in August unless renewed. Failure to reach a more binding agreement could result in tariff rates reverting to April levels, or higher, according to US trade officials.
Analysts at Bloomberg Economics, including Adam Farrar and Michael Deng, noted that the stakes are significantly higher in London than they were in Geneva.
“This time around, there’s no such low-hanging fruit,” they said in a pre-summit note. “The agenda is more complex and politically charged. Both parties will need to move beyond rhetoric and produce tangible commitments.”
As talks commence, stakeholders across the global supply chain are watching closely. A successful outcome in London could mark a turning point in one of the world’s most critical economic relationships, while failure could reintroduce volatility into commodity markets, tech sectors, and multilateral trade diplomacy.
