Trump and Xi in rare accord: Talks resume in London

New negotiations, old fronts

On Monday, the United States and China meet in London to restart trade negotiations aimed at alleviating growing tensions over rare earths and advanced technology.

The meeting follows a phone call between Donald Trump and Xi Jinping, where both expressed a willingness to revive the stalled compromise from Geneva.

Trump stated that he expects “a very positive meeting,” while China’s Foreign Ministry hopes the U.S. will “dismantle the negative actions directed at China.”

Rare resources in focus

The battle over rare earths – essential for everything from smartphones to defense systems and electric vehicles – is the main topic on the agenda.

The U.S. seeks to normalize trade flows disrupted in April, while China demands reductions in both tariffs and export restrictions.

“We want the earths and magnets to flow freely again – like before April,” said Kevin Hassett, head of the U.S. National Economic Council, in a TV interview Sunday. “It has been made clear to them.”

From Geneva to London – no guarantees

The meeting follows the failed settlement in Geneva, where mutual accusations of breach of agreement created a rift.

Tariff levels peaked in May at over 100%, and although a temporary de-escalation was negotiated, dialogue quickly stalled.

In response to the U.S.’s restrictions on AI technology, software, and Chinese students, Beijing limited the export of rare earths.

Economic turmoil at home – with deflation and rising unemployment – gives Xi Jinping extra motivation to find a sustainable solution.

Technology, tariffs, and diplomacy

The presence of both U.S. Trade Representative Jamieson Greer and China’s Vice Premier He Lifeng underscores the significance of the meeting.

The negotiations will cover everything from technology and tariff rates to student exchanges.

While Trump has implemented a temporary tariff pause, it expires in August. If no agreement is reached, he threatens to reinstate the announced tariff increases.

Cautious optimism

Wall Street shows some optimism, but expectations remain modest. Bloomberg economists warn that there are no “low-hanging fruits” this time – and the complexity of the negotiation topics makes a quick resolution unlikely.

The Chinese news agency Xinhua criticized the U.S.’s mixing of economic and security policy, but also emphasized that the path to cooperation is still open:
“Economic relations should be based on mutual benefit and win-win.”

 

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