US-China Trade Talks In London Enter Second Day Amid Rare Earths Dispute And Export Control Tensions

U.S. Commerce Secretary Howard Lutnick reported positive momentum in second-day trade negotiations with China in London, as both superpowers work to resolve export control disputes that have strained bilateral relations since their Geneva agreement.

What Happened: The talks, led by U.S. Treasury Secretary Scott Bessent, Lutnick, and Trade Representative Jamieson Greer, resumed Tuesday with Chinese Vice Premier He Lifeng‘s delegation following nearly seven hours of Monday discussions. “They’re going well, and we’re spending lots of time together,” Lutnick told reporters, according to Reuters.

The negotiations focus on rare earth mineral export restrictions that China imposed in April, disrupting global supply chains. China holds a near-monopoly on rare earth magnets crucial for electric vehicle motors used by General Motors Co. GM, Ford Motor Co. F, and Stellantis NV STLA. White House economic adviser Kevin Hassett indicated the U.S. would lift semiconductor export controls in exchange for accelerated rare earth deliveries.

See Also: Tesla Stock Climbs 2.3% In Tuesday Pre-Market: What’s Going On?

Why It Matters: China’s May customs data showed exports to the U.S. plunged 34.5%, while overall exports rose 4.8% year-over-year, missing analyst expectations. However, exports to other jurisdictions increased 11.4%, suggesting China has redirected trade capacity away from the U.S. market.

The talks follow a phone call between President Donald Trump and Chinese President Xi Jinping last week, which Trump described as reaching “a very positive conclusion for both countries.”

The negotiations occur as Trump’s shifting tariff policies have cost companies billions in lost sales while creating global market volatility. Current U.S. tariffs on Chinese goods remain at 30%, down from peak rates of 145%.

The talks include Lutnick, whose agency oversees export controls, indicating how central rare earth minerals have become to the negotiations. Both sides are expected to issue updates later Tuesday following the resumed discussions.

Image via Shutterstock

Read Next: Hyundai Secures One-Year Rare Earth Minerals Supply, Avoids Supply Chain Disruption: Report

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.