Trump admits China talks ‘not easy’ as day one ends without deal
Top US and Chinese officials will resume trade negotiations in London on Tuesday, aiming to ease export restrictions on critical goods such as rare earth materials vital to technologies from electric vehicles to fighter jets, which have disrupted global supply chains and dampened economic sentiment.
The high-stakes talks follow a preliminary deal reached in Geneva last month, which temporarily calmed market fears. However, tensions quickly resurfaced after Washington accused Beijing of restricting exports of strategic materials essential to the auto, aerospace, semiconductor, and defence sectors.
Monday’s discussions, held at Lancaster House near Buckingham Palace, ran for over six hours and concluded around 8pm. Talks are set to continue at 10am on Tuesday.
The negotiations take place against the backdrop of sharply declining trade. Chinese customs data shows that exports to the US plummeted 34.5% in May—the steepest drop since February 2020, during the early days of the pandemic.
The US delegation is led by Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and US Trade Representative Jamieson Greer. Lutnick’s presence underscores the centrality of export controls in the discussions, particularly given China’s near-monopoly in rare earth magnets—a key component in EV motors.
Vice Premier He Lifeng heads the Chinese delegation but declined to comment publicly.
“We’re doing well with China. China is not easy,” President Donald Trump told reporters on Monday. “I’ve only received good reports.”
Bessent described Monday’s meeting as “productive,” while Lutnick called the discussions “constructive.”
The US has signalled a willingness to relax export restrictions on high-tech goods, including chip design software, jet engine components, chemicals, and nuclear materials. In return, it is seeking guarantees that China will ease its grip on rare earth exports. Trump, however, offered no firm commitment, saying only, “We’ll see,” when asked whether the restrictions would be lifted.
“China has taken advantage of the US for many years,” Trump said. “We want China to open up.”
In Washington, National Economic Council Chairman Kevin Hassett offered the clearest indication yet of a possible deal. He told CNBC that following the London talks, the US expects to ease certain controls, while China is expected to increase rare earth shipments.
However, Hassett clarified that restrictions would remain on advanced semiconductors, particularly Nvidia’s H2O chips used for artificial intelligence development. “I’m talking about other semiconductor export controls that may be important to them as well,” he added.
The resumption of talks comes just days after Trump and President Xi Jinping spoke by phone—their first conversation since Trump took office in January. Following the call, Trump said Xi had agreed to resume rare earth shipments to the US, and Reuters reported that China had granted temporary export licences to suppliers working with the top three American automakers.
Investor sentiment reacted positively. Chinese stocks traded in Hong Kong entered bull market territory, while US equities climbed, with the S&P 500 now just 2% below its February peak.
