London (AFP) – China’s vice premier and top trade negotiator said Beijing was ready to “strengthen cooperation” with Washington, Chinese state media said Wednesday, following trade talks in London that it reported had made substantial progress. US Commerce Secretary Howard Lutnick expressed optimism after a full day of negotiations, stating that concerns surrounding rare earth minerals and magnets “will be resolved” eventually, as the deal is implemented. However, this framework will first need to be approved by leaders in Washington and Beijing, according to officials, at the conclusion of meetings at London’s historic Lancaster House.
All eyes were on the outcomes of negotiations as both sides attempted to overcome an impasse over export restrictions. US officials had previously accused Beijing of slow-walking approvals for shipments of rare earths. The world’s two biggest economies were also seeking a longer-lasting truce in their escalating tariff war, as levies are currently only temporarily on hold. “We’re moving as quickly as we can,” US Trade Representative Jamieson Greer told reporters Tuesday. “We would very much like to find an agreement that makes sense for both countries,” he added, noting that the relationship was complex. “We feel positive about engaging with the Chinese,” he maintained.
Speaking separately to reporters, China International Trade Representative Li Chenggang remarked, “Our communication has been very professional, rational, in-depth, and candid.” Li expressed hope that the progress made in London would help boost trust on both sides. In a state media readout of the talks released Wednesday, Chinese Vice Premier He Lifeng, who led Beijing’s team in London, stressed the need for the two sides to strengthen cooperation in future dialogues. “As a next step, the two sides should… continuously enhance consensus, reduce misunderstandings, and strengthen cooperation,” He Lifeng stated, according to state broadcaster CCTV.
US Treasury Secretary Scott Bessent earlier described the closely watched trade talks as productive, although scheduling conflicts led to his departure from London while negotiations were still ongoing. Bessent, who led the US delegation alongside Lutnick and Greer, left early to return to Washington for testimony before Congress, a US official told AFP. While both sides do not yet have another gathering scheduled, Lutnick mentioned on Tuesday that US measures imposed when rare earths “were not coming” would likely be relaxed once Beijing moved forward with more license approvals.
Stocks rose on Wednesday as investors welcomed the China-US agreement to lower trade tensions, stoking hopes that the economic superpowers would eventually reach a broader tariff deal. Hong Kong emerged as one of the best performers in Asia, while European markets were also up. The London negotiations followed talks in Geneva last month, which resulted in a temporary agreement to lower tariffs. This time, the exports of rare earth minerals from China—used in various products including smartphones, electric vehicle batteries, and green technology—were a key issue on the agenda.
“In Geneva, we had agreed to lower tariffs on them, and they had agreed to release the magnets and rare earths that we need throughout the economy,” US President Donald Trump’s top economic adviser, Kevin Hassett, told CNBC on Monday. He noted that even though Beijing was releasing some supplies, “it was going a lot slower than some companies believed was optimal.”
Both countries “have developed almost a mirror arsenal of trade and investment weapons that they can aim at each other,” said Emily Benson, head of strategy at Minerva Technology Futures. As they leverage economic tools to try to shift global power structures, she advised that it may not be reasonable to expect a typical trade and investment deal. However, both sides could potentially find ways to stabilize an ongoing downward spiral. A dialing-down of tensions could involve Chinese efforts to expedite the process for granting export control licenses; Benson commented that Beijing appeared understaffed given the volume of requests. On the US side, this might look like a relaxation of certain export curbs in the high-tech domain, she added.
Still, observers remained cautious, with Thomas Mathews of Capital Economics warning that Washington was unlikely to “back off completely,” which could weigh on markets. Since returning to office, Trump has implemented a 10 percent levy on both allies and adversaries, threatening to impose steeper rates on various economies. His tariffs have noticeably impacted trade, with data showing that Chinese exports to the United States plunged in May. The World Bank on Tuesday joined other international organizations in slashing its 2025 global growth forecast amid ongoing trade uncertainty. Additionally, China is in discussions with partners, including Japan and South Korea, to build a united front against Trump’s tariffs.
© 2024 AFP
