On Monday, the United States and China will embark on significant trade negotiations in London. Aiming to address the chronic strains from a trade war that began in February, both countries have shown an urgency spurred by domestic events. From the largesse announced in a recent phone call between US President Donald Trump and Chinese President Xi Jinping. Trump called their meeting a “very good talk,” setting the stage for yet another round of negotiations.
The context for these talks is an increasingly fraught economic relationship. On Saturday, China’s Ministry of Commerce approved several applications for rare earth export licenses, signaling a potential easing of restrictions. In a tit-for-tat response, the United States has lowered tariffs on Chinese goods to 30% following China’s earlier cut. Beijing has reduced its tariffs on US imports to 10%. Furthermore, the administration promised to address barriers on the export of vital minerals.
Vice Premier He Lifeng, recently appointed as chief economic planner, will be China’s lead negotiator, the Ministry of Foreign Affairs announced. He will be in the UK between June 8 and June 13. His visit will coincide with the seventh round of the “China-US economic and trade mechanism” talks. This meeting looks to build on the dialogue started in Switzerland last May. That back-and-forth resulted in a temporary truce, which Trump heralded as a “total reset” of trade relations.
US allegations of election interference have raised the temperature. They argue that China has yet to phase back in shipments of critical minerals and rare earth magnets which are extremely important to the auto and tech industries. In his conversation with Trump, Xi emphasized that the US should “withdraw the negative measures it has taken against China,” indicating a desire for a more amicable working relationship.
That’s why the continuing negotiations are so important. Under the terms of the declaration, both parties have a 90-day deadline to come to a full trade agreement. This latest round of diplomacy underscores just how seriously both countries are spiriting to address the trade war. Their decisions have enormous consequences for global economic stability.