US and Chinese officials meet in London for pivotal trade talks

Top US and Chinese officials were due to meet in London on Monday for talks aimed at defusing the high-stakes trade dispute that has widened in recent weeks beyond tit-for-tat tariffs to export controls over goods critical to global supply chains.

Officials from the two superpowers were due to meet at the ornate Lancaster House to try to get back on track with a preliminary agreement struck last month in Geneva that had briefly lowered the temperature between Washington and Beijing.

The talks, which were due to start around 1130 GMT on Monday, come at a crucial time for both economies, with investors looking for some relief from US President Donald Trump's cascade of tariff orders since his return to the White House in January.

"The next round of trade talks between the US and China will be held in the UK on Monday," a UK government spokesperson said on Sunday. "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."

Gathering there will be a US delegation led by Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer, and a Chinese contingent helmed by Vice Premier He Lifeng.

In Geneva the two sides agreed to reduce steep import taxes on each other's goods that had had the effect of erecting a trade embargo between the world's No. 1 and 2 economies, but US officials in recent weeks accused China of slow-walking on its commitments, particularly around rare earths shipments.

The inclusion of Lutnick, whose agency oversees export controls for the US, is one indication of how central rare earths has become. He did not attend the Geneva talks, at which the countries struck a 90-day deal to roll back some of the triple-digit tariffs they had placed on each other.

POSITIVE CONCLUSION

The second round of meetings comes four days after Trump and Chinese leader Xi Jinping spoke by phone, their first direct interaction since Trump's January 20 inauguration.

During the more than one-hour-long call, Xi told Trump to back down from trade measures that roiled the global economy and warned him against threatening steps on Taiwan, according to a Chinese government summary.

But Trump said on social media the talks focused primarily on trade led to "a very positive conclusion," setting the stage for Monday's meeting in London.

The next day, Trump said Xi had agreed to resume shipments to the US of rare earths minerals and magnets. China's decision in April to suspend exports of a wide range of critical minerals and magnets upended the supply chains central to automakers, aerospace manufacturers, semiconductor companies and military contractors around the world.

"We want China and the United States to continue moving forward with the agreement that was struck in Geneva," White House spokeswoman Karoline Leavitt told the Fox News program "Sunday Morning Futures" on Sunday. "The administration has been monitoring China's compliance with the deal, and we hope that this will move forward to have more comprehensive trade talks."

The preliminary deal in Geneva sparked a global relief rally in stock markets, and US indexes that had been in or near bear market levels have recouped the lion's share of their losses.

The S&P 500 Index, which at its lowest point in early April was down nearly 18% after Trump unveiled his sweeping "Liberation Day" tariffs on goods from across the globe, is now only about 2% below its record high from mid-February. The final third of that rally followed the US-China truce struck in Geneva.

Still, that temporary deal did not address broader concerns that strain the bilateral relationship, from the illicit fentanyl trade to the status of democratically governed Taiwan and US complaints about China's state-dominated, export-driven economic model.

While the UK government will provide a venue for Monday's discussions, it will not be party to them but will have separate talks later in the week with the Chinese delegation.

The dollar slipped against all major currencies on Monday as investors waited for news, while oil prices were little changed.