Senior officials from the United States and China resumed high-level trade negotiations in London on Tuesday, focusing on export controls and rare earth minerals, as both economic giants attempt to stabilize a fragile relationship that has caused global supply chain volatility.
The talks, entering their second day, come just weeks after a preliminary trade agreement was reached in Geneva. That deal had briefly lifted investor sentiment, but new accusations from Washington including claims that Beijing is intentionally restricting exports of critical raw materials have since renewed tension between the two superpowers.
The latest round of discussions centers on strategic materials such as rare earth elements, which are essential to global industries including automotive manufacturing, aerospace, semiconductors, and defense technology. China controls over 60% of global rare earth supply and has increasingly used export curbs as a tool of economic statecraft, citing national security.
Background: From Tariffs to Tech Controls
Since 2018, U.S.–China trade relations have been marked by tariff wars, intellectual property disputes, and tech restrictions, resulting in hundreds of billions in disrupted trade. The Trump administration initiated tariffs on Chinese goods, citing unfair trade practices, while the Biden administration has largely continued pressure shifting focus to semiconductors and advanced technologies.
The Geneva accord last month was seen as a rare moment of cooperation, involving partial tariff rollbacks and promises of transparency in tech-related trade. However, U.S. officials now say that Chinese compliance has been inconsistent, especially in the area of export licensing and customs clearance for critical goods.
“We remain committed to fair and reciprocal trade,” said a senior U.S. trade official before the London talks resumed. “But we are deeply concerned about non-transparent export controls that risk undermining the global economy.”
Beijing, for its part, has accused Washington of attempting to “contain China’s rise” through unilateral export bans on chips and chipmaking equipment, including measures targeting companies like Huawei, SMIC, and several Chinese AI firms.
Global Stakes: Supply Chain Risks and Market Jitters
The stakes are high. Disruptions in rare earth supplies could reverberate across industries, particularly electric vehicles (EVs), green energy infrastructure, and military-grade systems. As countries push toward digital and green transitions, the ability to secure raw materials has become a geopolitical flashpoint.
Markets are watching closely. After the Geneva deal, indexes rose on hopes of a thaw. But continued friction particularly over strategic exports and tech sovereignty could spell deeper divides and renewed uncertainty.
A breakthrough in London would not only mark a diplomatic win, but potentially ease pressure on global inflation, manufacturing costs, and geopolitical risk indices.
Negotiators are expected to conclude a joint statement by Wednesday.
