Talks between the U.S. and China continue in London

The China-US Trade War after the Donald Trump Presidency: Trump’s Correspondence and the U.S.-China Relations

There was a Phase One trade agreement struck during the first term of Donald Trump’s presidency in which China was urged to purchase more American goods.

China halted more of its export of rare earths in response to the U.S. tariffs. Since 2024, Beijing has restricted the export of rare earths to the U.S. and European Union but last week cut off more minerals. Chinese customs data show rare earths exports by value have dropped by more than 20% this year compared to the same period last year.

There have also been tensions after the U.S. announced stringent new export controls on high-end semiconductor chip technology, including chip design software, on China — and said it also plans to revoke some visas held by Chinese students.

The leader of the United States and China said on their call that the leaders of the US and China needed to avoid disruption or even sabotage, seeming to reference the idea that detractors of China in the Donald Trump administration had pressured some of these efforts. The actions were done at the direction of Mr. Trump according to a person familiar with the efforts.

In addition to Treasury Secretary Scott Bessent, who is leading the talks for the United States, and Jamieson Greer, the U.S. trade representative, the American delegation includes Commerce Secretary Howard Lutnick, who overseas the export controls. On the Chinese side, the negotiations are led by He Lifeng, the vice premier in charge of economic policy.

The UK government is providing the venue for the U.S.-China talks, but it is not involved in them. “We are a nation that supports free trade and know that a trade war is not in the interest of the country,” the statement said.

In a separate meeting in London, China’s commerce minister Wang Wentao spoke with Britain’s business secretary, Jonathan Reynolds. The commerce ministry of China said that Wang wanted to see greater cooperation between China and Britain on issues such as finance and sustainable living.

U.S. tariffs on goods from China are higher than they are in other countries. China reduced tariffs to 10% while the U.S. cut them to 30%.

Chinese exports of rare earth minerals, which are vital to carmakers and other industries, and China’s access to high-end technology from the U.S., including computer chips, are high on the agenda this time around.

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Relations between the two countries deteriorated after they reached a tentative truce in Geneva, with each accusing the other of violating the agreement.

Yu Jie, senior research fellow on China at London’s Chatham House international affairs think-tank, warns that we “should not hold our breath for any major progress” following the talks, with both sides unlikely to offer any further tariff reductions. We’re now in the middle of trade negotiations between Beijing and Washington. China is aware of the importance of the rare earth export controls. On the other hand, the U.S. really wants to slow down China’s technology progress.”

Yu says the two sides will have to talk through some of these thornier sticking points over the next few days. Lutnick said Tuesday he expects the talks to go on “all day.” He told reporters the talks were “going well” and “we’re spending lots of time together.” The Chinese delegation is in London all week and talks could go on beyond Tuesday.

President Trump told reporters at the White House on Monday that he was getting “good reports” from the talks. We’re doing well with China. China’s not easy,” Trump said.

Lancaster House is a mansion in the U.K. which is where a second round of talks between the US and China will be held. Investors and world leaders are watching these talks closely to see if they can help thwart the prospect of a deepening trade war between the world’s two biggest economies.