Top U.S. and Chinese officials resumed trade talks in London on Tuesday, with both sides signaling cautious optimism despite ongoing disputes over critical minerals, semiconductor restrictions, and mutual sanctions violations.

“Going Well”: U.S. Officials Signal Progress

U.S. Commerce Secretary Howard Lutnick said discussions at Lancaster House were “going well” as Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng reconvened following the 90-day tariff truce reached in Geneva. “We’ve been [talking] all day yesterday and we expect to go all day today,” Lutnick told reporters.

The resumption follows a direct phone call between Presidents Trump and Xi Jinping, laying the groundwork for renewed engagement after months of strain.

Rare Earths and Tech Export Disputes Persist

Although the May truce saw both sides agree to slash tariffs by 115 percentage points, progress has been undermined by China’s delays in approving rare earth exports—materials vital to U.S. and European defense and tech sectors.

In retaliation, the U.S. has moved to ban chip design software sales to Chinese firms and warned allies against using Huawei semiconductors—actions Beijing says breach the Geneva deal.

Conditional Easing of Chip Sanctions Possible

Senior White House officials hinted that Trump could consider easing restrictions on chip exports if China resumes rare earth shipments at pre-April levels. The Biden-era chip export policy has remained largely intact under Trump’s second term, continuing to block Chinese access to advanced design tools and components.

Despite the friction, both delegations appear determined to maintain the dialogue ahead of next week’s G7 summit in Canada, where trade rebalancing and China policy are expected to dominate.