Honolulu Star Bulletin - US, China begin key trade talks in London

The two sides are meeting in the historic Lancaster House, run by the UK Foreign Office, following a first round of talks in Geneva last month.

Chinese Vice Premier He Lifeng was again heading the team in London. Chinese state news agency Xinhua reported the start of the talks.

Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer are leading the US delegation, President Donald Trump said Friday.

"The meeting should go very well," Trump said on his Truth Social platform.

His press secretary, Karoline Leavitt, told Fox News on Sunday: "We want China and the United States to continue moving forward with the agreement that was struck in Geneva."

While the UK government reiterated that it was not involved in the discussions, a spokesperson said: "We are a nation that champions free trade."

UK authorities "have always been clear that a trade war is in nobody's interests, so we welcome these talks", the spokesperson added.

- Rare earths -

The talks in London come just a few days after Trump and Chinese President Xi Jinping finally held their first publicly announced telephone talks since the Republican returned to the White House.

Trump said Thursday's call reached a "very positive conclusion".

Xi was quoted by Xinhua as saying "correcting the course of the big ship of Sino-US relations requires us to steer well and set the direction".

Tensions between the two nations have soared, with Trump accusing Beijing of violating a tariff de-escalation deal reached in Geneva in mid-May.

"We need China to comply with their side of the deal. And so that's what the trade team will be discussing tomorrow," Leavitt said Sunday.

A key issue will be Beijing's shipments of rare earths -- crucial to a range of goods including electric vehicle batteries and which have been a bone of contention for some time.

"Rare earth shipments from China to the US have slowed since President Trump's 'Liberation Day' tariffs in April," said Kathleen Brooks, research director at trading group XTB.

"The US wants these shipments to be reinstated, while China wants the US to rethink immigration curbs on students, restrictions on access to advanced technology including microchips, and to make it easier for Chinese tech providers to access US consumers," she added.

In April, Trump introduced sweeping worldwide tariffs that targeted China most heavily.

At one point, Washington hit Beijing with additional levies of 145 percent on its goods, triggering a tit-for-tat escalation as China's countermeasures on US goods reached 125 percent.

In Switzerland, after two days of talks, the two sides agreed to slash their staggeringly high tariffs for 90 days.

But differences have persisted, including over China's restrictions on exporting rare earth minerals.

The impact was reflected in the latest official export data released Monday in Beijing.

Exports to the United States fell 12.7 percent in May from the previous month, with China shipping $28.8 billion worth of goods.

This was down from $33 billion in April, according to Beijing's General Administration of Customs.

- 'Green channel' -

Throughout its talks with Washington, China has also launched discussions with other trading partners -- including Japan and South Korea -- to try to build a united front to counter Trump's tariffs.

On Thursday, Beijing and Canada agreed to regularise their channels of communication after strained ties.

Canadian Prime Minister Mark Carney and Chinese Premier Li Qiang also discussed trade and the fentanyl crisis, Ottawa said.

Beijing has also proposed establishing a "green channel" to ease exports of rare earths to the European Union, and fast-tracking approval of some export licenses.

China is expected to host a summit with the EU in July, marking 50 years since Beijing and Brussels established diplomatic ties.

I.Kai--HStB