Kristina Roberts
On Monday, important officials from the United States and China came together in London to try to calm down a big argument about trade. They gathered at Lancaster House, a grand old building, to discuss a deal they had begun last month in Geneva. That deal helped bring a short pause in the fighting over taxes on each other’s goods.
The meeting started around 11:30 GMT, and both countries felt the pressure. Investors had been worried because the U.S. had placed many new tariffs on imports since its President returned to power in January. The tension had begun with taxes and had grown worse with rules that stopped some key exports.
A spokesperson from the UK government said: “The next round of trade talks between the U.S. and China will be held in the UK on Monday.” They added that free trade is important and that they hoped both sides would find a way to make peace.
The U.S. team included three top officials: Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer. They came prepared to talk about money, exports, and trade rules. China’s side was led by Vice Premier He Lifeng. After the talks in Geneva, U.S. officials had accused China of not keeping its promises, especially about sending rare earth minerals. These rare earths are really important for making cars, computers, phones, and defense equipment.
Because rare earth exports had become a big concern, the Americans included Howard Lutnick in these talks—he was not there in Geneva, but now he would have a key role. The Geneva deal had set a 90-day window for both sides to reduce high taxes and agree on other trade matters. But problems came up when rare earths weren’t shipped as agreed.
Just a few days before the London talks, Presidents Donald Trump and Xi Jinping spoke on the phone. According to a summary from China, Xi told Trump to stop taking measures that harmed the world economy, and warned him not to threaten Taiwan. Trump later described their discussion on social media, saying it ended with “a very positive conclusion,” and that China would start sending rare earth minerals and magnets again.
That statement helped a bit. Trump said, “China had agreed to resume shipments to the U.S. of rare earths minerals and magnets.” This was important because China had stopped exporting many critical minerals in April, and this had disrupted manufacturing worldwide.
White House spokesperson Karoline Leavitt told Fox News: “We want China and the United States to continue moving forward with the agreement that was struck in Geneva.” She said the U.S. was keeping an eye on China’s actions and hoped the London talks would bring “more comprehensive trade talks.”
The truce from Geneva helped calm global markets. The S&P 500 index, which had dropped almost 18% by early April after the new tariffs started, recovered most of its losses and by early June was just 2% below its February high. The final part of that comeback happened after the Geneva deal.
But the trade truce did not fix everything. There were still serious problems like illegal fentanyl imports, the political situation in Taiwan, and worries about China’s economic controls. The U.K. hosted the talks but didn’t take part; it would hold its own meetings later in the week with Chinese leaders.
At the London talks, U.S. trade adviser Kevin Hassett said the American team was hoping for a symbolic handshake to confirm China’s promises about rare earths. He said they expected a “short meeting with a big, strong handshake.” Trump’s administration hoped that once China followed through, the U.S. would ease its own export controls, especially on computer chips.
Markets responded as the talks began. Asian stock markets rose, and the U.S. dollar dropped slightly. Investors hoped the London meeting would focus heavily on rare earths, which China currently dominates. In May, China’s rare earth exports had gone up about 23% from April but were still lower than a year earlier. U.S. officials wanted to see more commitment and big shipments of these critical minerals right away.
China’s customs reported that their exports to the U.S. dropped 35% in May compared to a year earlier. However, exporters shipped more to Southeast Asian and European countries. Despite higher tariffs, global demand helped China’s overall exports grow a bit. China also started issuing more licenses to export rare earths after the Geneva deal, but the U.S. still accused them of dragging their feet.
Some experts say the London meeting might just produce a small agreement, like buying some U.S. goods and working together on fentanyl control, but a deeper fix was unlikely. This is because China’s economic system, with tight government control and state-owned businesses, is unlikely to change much, and Trump’s unpredictable trade style added to concerns.
Still, both sides had reasons to make progress. The U.S. needed market calm to keep its economic story strong, and China faced domestic problems like a shaky property market and slow consumer growth. Both wanted to show they could solve problems—Trump said it looked good for “market serenity,” while Xi wanted to steady China’s slipping exports and slow economy.
In London, the tone was serious and urgent. U.S. officials were pushing hard on rare earths. China had already eased some export restrictions. If the handshake went well, the U.S. could relax controls on tech exports. After that, they could move on to smaller issues. The goal was not to rewrite the whole economic system, but to find quick steps that helped both nations and calmed global markets.
These talks were part of a long story. Since February, when new tariffs started, both countries had engaged in a patent contest of tariffs and controls. They had taken turns raising tariffs, blaming each other, and trying to push tough bargains. The Geneva truce in May was a chance to pause, but that agreement needed follow-up. Now, London was meant to be that follow-up—the moment to move from paper promises to real action.
As business leaders and investors watched closely, all eyes were on rare earths. Companies from car makers to chip makers depended on them. The symbolic handshake could be a sign that things were moving in the right direction. And if it went well, the London talks might restart a more complete negotiation.
Still, big problems remained. China and the U.S. disagreed on trade fairness, economic models, semiconductors, student visas, and Taiwan. What happened in London would either lead to a fresh push to mend things—or show that deeper issues still blocked a deal.
