Commerce Secretary Howard Lutnick, Treasury Secretary Scott Bessent, and Trade Representative Jamieson Greer met with high-level Chinese officials in London on Monday to seek a resolution to the trade dispute between the world’s two largest economies.
President Donald Trump announced the London trade talks last Thursday, after the first telephone conversation of his second term with Chinese dictator Xi Jinping. Trump described the tone of the 90-minute phone call as “very positive” and said, “we’re in very good shape with China and the trade deal.”
The most important difference between official readouts of the call in Beijing and Washington was that Chinese officials did not mention rare earth minerals, while Trump said they were an important part of his conversation with Xi.
Commerce Secretary Lutnick’s inclusion in the London negotiating team was widely taken as a sign that rare earths, which are extremely valuable to high-tech industries, would be part of the upcoming trade talks. Lutnick has been calling for even tougher export restrictions on sales of advanced technology to China.
National Economic Council director Kevin Hassett told CNBC on Monday he expected “a short meeting with a big, strong handshake” on critical mineral supplies.
“Immediately after the handshake, any export controls from the U.S. will be eased, and the rare earths will be released in volume, and then we can go back to negotiating smaller matters,” he said.
Hassett said on Sunday that China has begun releasing critical mineral exports at a rate that is “higher than it was, but not as high as we believe we agreed to in Geneva.” He was referring to trade talks held in Geneva in early May.
British Chancellor of the Exchequer Rachel Reeves met with Bessent and Chinese Vice Premier He Lifeng on Sunday but said her government would not be directly involved in the U.S.-China discussions.
“We are a nation that champions free trade and have always been clear that a trade war is in nobody’s interests, so we welcome these talks,” Reeves said.
The Chinese Foreign Ministry said He plans to remain in London until Friday, but did not indicate how much of that time would be devoted to talks with the U.S. team. Analysts doubted the full scope of the dispute between the U.S. and China could be addressed in a single week.
The U.S. stock market seemed guardedly optimistic about the London meeting, holding on to a rally that began after Trump’s phone call with Xi and accelerated with a good employment report on Friday. The latest inflation data will be released later in the week, potentially strengthening the market rally if it shows the effect of tariffs on consumer prices remains minimal.
“With the S&P 500 closing above 6,000 for the first time since February, stocks are effectively looking through the current tariff uncertainty into a more stimulative economic climate,” Treasury Partners chief investment officer Richard Saperstein said Monday.
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