Top American and Chinese trade negotiators resumed critical talks in London on Tuesday, as tensions over rare earth exports and technology controls persist despite signs of easing after a recent Trump-Xi phone call.

Rare Earths at Center of Negotiations

The talks—held at Lancaster House—are focused on China’s recent restrictions on rare earth metals, which are essential for sectors like electric vehicles, defense, aerospace, and semiconductors. US Commerce Secretary Howard Lutnick’s presence underlined the centrality of export controls in the discussions, as his department oversees such regulations.

Following President Trump’s call with Xi Jinping, Beijing granted temporary export licenses to rare earth suppliers of the top three US automakers, signaling a potential opening. Still, factories globally are bracing for long-term bottlenecks.

Pressure from a Sinking Trade Balance

China’s exports to the US fell by 34.5% in May—its sharpest monthly drop since February 2020—putting Beijing under pressure to secure trade stability. Investors are watching closely for signs of improvement after the brief optimism surrounding the Geneva deal began to wane.

Trump’s tariff policies, often unpredictable, have rattled ports and businesses alike. The 90-day Geneva agreement had paused triple-digit tariffs on several categories of goods but left key export controls unresolved.

A High-Stakes Second Round

This second day of talks includes Treasury Secretary Scott Bessent, Trade Representative Jamieson Greer, and Vice Premier He Lifeng. Both sides are expected to issue post-talk updates. Analysts remain cautious, noting that underlying mistrust and geopolitical friction continue to shadow progress.