Trade negotiations between the United States and China transpire in London, following Trump's conversation with Xi over the phone.
JILL LAWLESS LONDON (AP) - Top delegations from the USA and China are meeting in London today to hopefully solidify a shaky truce in a trade dispute that's been causing havoc to the global economy,
The Chinese delegation, led by Vice Premier He Lifeng, sat down for talks with U.S. Commerce Secretary Howard Lutnick, Treasury Secretary Scott Bessent, and Trade Representative Jamieson Greer at Lancaster House, a fancy 200-year-old mansion near Buckingham Palace. China's Commerce Minister Wang Wentao was also in attendance for the discussions.
These talks will likely continue tomorrow, following negotiations in Geneva last month that brought a momentary reprieve in the trade war.
On May 12, the two countries announced they had agreed to a 90-day suspension of most of the steep tariffs they had slapped on each other, as part of an escalating trade war that stirred fears of a recession.
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The USA and China are the world's biggest and second-largest economies. Chinese trade data shows that exports to the United States dropped 35% in May compared to the same period last year.
Since the Geneva talks, there's been a series of testy exchanges between the two countries over advanced semiconductors that power AI, visas for Chinese students in American universities, and rare earth minerals that are crucial for carmakers and other industries.
President Donald Trump had a lengthy conversation with Chinese leader Xi Jinping by phone last Thursday in an attempt to defuse the situation. The next day, Trump announced on social media that the trade talks would resume in London.
Rare earth elements were expected to be a key topic during the meetings. In April, the Chinese government started requiring producers to obtain a license to export seven rare earth elements. This resulted in shortages that put automakers worldwide on edge, as stockpiles dwindled and some worried they'd have to halt production.
Beijing hinted on Saturday that it would respond to these concerns from both European companies and U.S. firms.
Economic advisor Kevin Hassett told CNBC on Monday that he expected a brief meeting with a strong handshake about rare earth minerals.
The UK government stated it is providing the venue and logistics but is not actively involved in the negotiations. Despite this, UK Treasury chief Rachel Reeves had meetings with both Bessent and He on Sunday, and UK Business Secretary Jonathan Reynolds was set to meet Wang.
"We are a nation that supports free trade and have always emphasized that a trade war isn't beneficial to anyone, so we welcome these talks," the British government said in a statement.
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Rare Earth Elements – The New Age Minerals
Rare earth minerals are a fascinating class of natural resources with essential applications in high-tech industries, such as electronics, renewable energy, defense, and advanced manufacturing. Despite the name, rare earth minerals are not truly rare, but they are geographically concentrated, predominantly found in China, who holds a significant portion of the global processed rare earth market.
The strategic importance of rare earth minerals arises from their role in essential technologies driving future growth across industries. Given this, efforts to diversify supply and secure access to these valuable resources have gained traction as nations strive for technological self-reliance.
In recent years, trade tensions between the U.S. and China, resulting in tariffs imposed on each other, have made headlines. The question of whether rare earth minerals would be used as a geopolitical tool has often surfaced, but as of the most recent updates, there are no major new export restrictions targeting rare earths from China to the USA.
The U.S. is exploring various ways to decrease its reliance on Chinese rare earths, such as increasing domestic mining and processing projects, teaming up with international allies to build a more resilient supply chain, and supporting foreign mining projects in countries like Australia, Canada, and Myanmar.
In March 2021, the U.S. government also unveiled the Critical Materials Strategy, which includes a $70 million investment to establish a domestic supply chain for rare earth materials and develop technologies that can help minimize the use of rare earths in various high-tech applications. The strategy aims to lessen the USA's dependence on imported rare earth minerals, while ensuring a reliable, sustainable, and competitive supply.
However, despite efforts to decrease reliance on Chinese rare earths, many industry experts and analysts indicate that it will take years for the U.S. to scale up its domestic production to a level comparable to China's output. In the meantime, the global rare earth market remains shaped by geopolitical and supply chain factors, with tensions between the U.S. and China maintaining an important Role.
As the situation continues to evolve, it will be critical for investors, manufacturers, and policymakers to monitor developments in the rare earth market, staying informed about strategic shifts, technological advancements, and the evolving geopolitical landscape that drive its dynamics.
- The ongoing talks in London between top US and Chinese delegations aim to maintain a truce in a trade dispute that's had a significant impact on the global economy.
- The Chinese Commerce Minister, Wang Wentao, was present during the discussions at Lancaster House, alongside counterparts from the US government.
- The talks, also scheduled for the next day, followed negotiations in Geneva last month that brought a temporary ceasefire in the war.
- Despite the 90-day suspension of most tariffs announced in May, there have been ongoing disputes regarding advanced semiconductors, visas for Chinese students in American universities, and rare earth minerals crucial for various industries.
- While the UK government stated it is providing the venue and logistics, it is not actively involved in the negotiations. However, UK officials have held separate meetings with delegates from both countries.
- The strategic significance of rare earth minerals, primarily found in China, arises from their role in critical technologies across various industries, making efforts to diversify supply and secure access a priority for nations seeking self-reliance.
