To help inform that debate, U.S.-China trade negotiations will resume in Washington on Tuesday. This comes after a pivotal meeting between senior officials from each country in London on Monday. The discussions aim to address the continuing trade war between the two global economic giants. This time, they focus narrowly on mineral exports, including those critical to US technology and automotive industries.
That’s exactly what U.S. President Donald Trump’s trade team did during the recent meeting at Lancaster House, in London. They discussed potential solutions to resolve trade barriers. In doing so, U.S. National Economic Council Director Kevin Hassett identified a key priority for the United States. The new country’s first goal is to loosen China’s stranglehold on rare earth minerals exports. These minerals are critical for the manufacturing of almost all electronic devices and electric vehicles.
As an example, China recently exhibited their willingness to lift restrictions on rare earth exports. This would be a huge win for U.S. and European automotive manufacturers. Those tensions flared earlier this month when Washington further restricted exports of chip design software to China. Thanks to that provision, that improvement became a reality.
Hassett stated, “Our expectation is that … immediately after the handshake, any export controls from the U.S. will be eased.” This statement speaks to the hopefulness of the ongoing negotiations and their likely positive effects on the U.S.-Mexico trade relationship in the future.
U.S. Treasury Secretary Scott Bessent was an active participant in these talks. He called for finding a “cooperative, competitive space” to alleviate trade disputes. The excitement about these negotiations has driven markets too, with U.S. stocks posting slight gains on Monday. The S&P 500 Index® could enjoy a significant bullish boost if negotiations conclude successfully—in fact, that’s what investors are betting on.
The S&P 500 now sits just shy of 2% from its all-time closing high set in February. Many analysts are hoping that a constructive outcome of U.S.-China trade talks would clear the way for the index to surpass that peak. The trading desk at JPMorgan noted that several upcoming events might contribute to pushing the S&P 500 over the top, highlighting the market’s sensitivity to developments in international trade.
As negotiations continue, both countries have much to gain from reaching a mutual agreement that may ease their increasingly complex economic ties. Industries that depend on rare earth minerals have a lot at stake.
Annex I
Supply chain constraints
Such constraints could have a largely negative effect on their manufacturing production capacity.