U.S. President Donald Trump’s top trade officials are meeting their Chinese counterparts in London on Monday to discuss resolving an ongoing trade dispute between the world’s two largest economies.
The U.S. delegation includes Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer.
China’s Foreign Ministry announced on Saturday that Vice Premier He Lifeng, Beijing’s chief trade negotiator, will be in the U.K. from June 8-13, and a meeting of the “China-U.S. economic and trade consultation mechanism” is scheduled to take place.
On Monday, National Economic Council Director Kevin Hassett told CNBC’s “Squawk Box” that the U.S. seeks confirmation from China to restore the flow of critical minerals.
“The purpose of today’s meeting is to ensure they are serious, but also to literally get handshakes and get this thing behind us,” Hassett said. He added that he expects “a short meeting with a big, strong handshake.”
“Our expectation is that immediately after the handshake, any export controls from the U.S. will be eased, and rare earths will be released in volume, allowing us to return to negotiating smaller matters,” Hassett explained.
This meeting follows a lengthy phone call last week between Trump and Chinese President Xi Jinping, as both sides seek to avoid a full-scale trade war.
Diplomatic efforts from both sides have intensified after weeks of rising trade tensions and uncertainty following Trump’s announcement of sweeping import tariffs on China and other trade partners in April.
Beijing retaliated, and a tit-for-tat escalation in tariffs followed until both sides agreed in Geneva in May to temporarily reduce duties for 90 days and continue negotiations. At that time, the U.S. tariff on Chinese imports was reduced from 145% to 30%, while China’s levies on U.S. imports were cut from 125% to 10%.
Since then, both China and the U.S. have repeatedly accused each other of violating the Geneva agreement, with Washington claiming Beijing was slow to approve the export of additional critical minerals to the U.S., while China criticized the U.S. for imposing new restrictions on Chinese student visas and additional export restrictions on chips.
U.S. Press Secretary Karoline Leavitt said on Sunday that the London talks would focus on progressing the Geneva agreement, emphasizing both sides’ strategic interests in each other’s markets.
No Quick Fix Analysts say that Monday’s talks are unlikely to yield significant progress in resolving disagreements and sector-specific tariffs targeting a range of strategic industries, from technology and critical minerals to manufacturing and agriculture.
Rebecca Harding, CEO of the Centre for Economic Security, told CNBC on Monday that China and the United States “are locked in an existential battle at the moment.”
“There’s absolutely no other way to describe all of this, and it’s about how data flows. It’s about information. It’s about AI. It’s about tech. It’s about defense too. China is rapidly expanding its munitions production right now. So it’s about how these two economies compete and survive in a digital world where no one really knows what the power of the nation-state is,” she said in CNBC’s “Squawk Box Europe.”
“This is much, much more than just about trade and what’s going on in that domain between the two countries. It’s about how they run their economies. This is only just starting, and effectively, it’s a battle for the 21st century,” she added.
While optimistic that talks are taking place, Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, told CNBC that it could take months for trade tensions to be resolved.
“I don’t really have very high expectations for these trade talks… I doubt they will reach an agreement very soon,” he said in CNBC’s “China Connection” on Monday.
“There could be some resolution on specific issues, like rare earths, for instance. China has already announced they will give some permits to foreign firms applying for imports. Now, those types of temporary solutions, we might see some of that come out. But I doubt we will have a complete solution coming from this dialog in the U.K.,” Zhang added.