Rare Earth Exports Take Center Stage In Latest US-China Trade Talks In London

Senior officials from the United States and China are scheduled to begin a new round of talks on Monday in London, amid signs of easing tensions between the two countries.

Last week, the Donald Trump administration confirmed that a U.S. delegation headed by Treasury Secretary Scott Bessent will head to the British capital. At the same time, China said Vice Premier He Lifeng will lead Beijing's representatives.

The talks will follow a phone call between Trump and Chinese President Xi Jinping on Thursday, which the U.S. president dubbed as a“very good talk”.The U.S. and China agreed to a trade deal last month, lowering reciprocal tariffs on each other after a month-long trade dispute. However, both sides have since accused each other of backing away from some of their commitments.

One crucial topic of discussion will be China's rare earth exports. Trump said last week that Xi had agreed to resume shipments of the critical minerals used in the defense industry.

“We want the rare earths, the magnets that are crucial for cell phones and everything else to flow just as they did before the beginning of April and we don't want any technical details slowing that down,” said Kevin Hassett, director of the National Economic Council, on CBS's Face the Nation.

On Saturday, China said that it has approved some rare earth export applications without specifying which country or industries are involved, according to a Bloomberg report.

The tariff pause for China expires in August unless a deal is agreed upon between the world's largest economies. The Trump administration has previously signaled that tariffs on Chinese exports will be reinstated at 145% without a trade agreement.

Monday's talks will also likely include U.S. curbs on Huawei's chips and foreign students from China. Last week, Trump said it would be his honor to welcome Chinese students to the U.S.

The iShares China Large-Cap ETF (FXI) has gained 21.8% this year, while the SPDR S & P 500 ETF (SPY) is up 1.7%.

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