Key US-China trade talks set for Monday in London
LONDON (Reuters) -Top U.S. and Chinese officials will sit down in London on Monday for talks aimed at defusing the high-stakes trade dispute between the two superpowers that has widened in recent weeks beyond tit-for-tat tariffs to export controls over goods and components critical to global supply chains.
At a still-undisclosed venue in London, the two sides will try to get back on track with a preliminary agreement struck last month in Geneva that had briefly lowered the temperature between Washington and Beijing and fostered relief among investors battered for months by U.S. President Donald Trump's cascade of tariff orders since his return to the White House in January.
"The next round of trade talks between the U.S. and China will be held in the UK on Monday," a UK government spokesperson said on Sunday. "We are a nation that champions free trade and have always been clear that a trade war is in nobody's interests, so we welcome these talks."
Gathering there will be a U.S. delegation led by Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer, and a Chinese contingent helmed by Vice Premier He Lifeng.
The second-round of meetings comes four days after Trump and Chinese leader Xi Jinping spoke by phone, their first direct interaction since Trump's January 20 inauguration.
During the more than one-hour-long call, Xi told Trump to back down from trade measures that roiled the global economy and warned him against threatening steps on Taiwan, according to a Chinese government summary.
But Trump said on social media the talks focused primarily on trade led to "a very positive conclusion," setting the stage for Monday's meeting in London.
The next day, Trump said Xi had agreed to resume shipments to the U.S. of rare earths minerals and magnets. China's decision in April to suspend exports of a wide range of critical minerals and magnets upended the supply chains central to automakers, aerospace manufacturers, semiconductor companies and military contractors around the world.
That had become a particular pain point for the U.S. in the weeks after the two sides had struck a preliminary rapprochement in talks held in Switzerland.
There, both had agreed to reduce steep import taxes on each other's goods that had had the effect of erecting a trade embargo between the world's No. 1 and 2 economies, but U.S. officials in recent weeks accused China of slow-walking on its commitments, particularly around rare earths shipments.
"We want China and the United States to continue moving forward with the agreement that was struck in Geneva," White House spokeswoman Karoline Leavitt told the Fox News program "Sunday Morning Futures' on Sunday. "The administration has been monitoring China's compliance with the deal, and we hope that this will move forward to have more comprehensive trade talks."
The inclusion at the London talks of Lutnick, whose agency oversees export controls for the U.S., is one indication of how central the issue has become for both sides. Lutnick did not attend the Geneva talks, at which the countries struck a 90-day deal to roll back some of the triple-digit tariffs they had placed on each other since Trump's inauguration.
That preliminary deal sparked a global relief rally in stock markets, and U.S. indexes that had been in or near bear market levels have recouped the lion's share of their losses.
The S&P 500 Index, which at its lowest point in early April was down nearly 18% after Trump unveiled his sweeping "Liberation Day" tariffs on goods from across the globe, is now only about 2% below its record high from mid-February. The final third of that rally followed the U.S.-China truce struck in Geneva.
Still, that temporary deal did not address broader concerns that strain the bilateral relationship, from the illicit fentanyl trade to the status of democratically governed Taiwan and U.S. complaints about China's state-dominated, export-driven economic model.
While the UK government will provide a venue for Monday's discussions, it will not be party to them but will have separate talks later in the week with the Chinese delegation.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


CNBC
14 minutes ago
- CNBC
Treasury yields slip as U.S.-China trade talks enter Day 2
Treasury yields slipped Tuesday as U.S. and Chinese officials resumed trade negotiations in London for the second day. The 10-year Treasury yield was down almost 3 basis points to 4.456% at 3.30 a.m. ET. The 2-year yield slipped around one basis point to 3.993%. The 30-year yield was lower by 3 basis points to 4.921%. One basis point equals 0.01%. Yields and prices move inversely in the bond market. U.S.-China trade negotiations in London resumed on Tuesday, building on a recent call between U.S. President Donald Trump and Chinese counterpart Xi Jinping. On Monday, Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer had talks with Chinese officials. Both sides have intensified diplomatic efforts following weeks of escalating trade tensions and uncertainty sparked by Trump's broad import tariffs on China and other key trading partners in April. "While we await any concrete news, it's worth remembering that markets have been used to a lot of back-and-forth in recent weeks," Deutsche Bank's analysts said, in reference to how U.S. tariffs slapped on China went all the way up to 145%, before being slashed to 30%, among other instances of policy reversals. "There've been several twists and turns already, and markets are getting fairly used to this uncertainty by now," wrote in a note published Tuesday. Deflation in China is also putting pressure on the Chinese government to negotiate a trade deal with Trump that benefits both countries, said Ed Yardeni, president of Yardeni Research. China's consumer prices fell for a fourth consecutive month in May, with the CPI falling 0.1% from a year earlier, data from the National Bureau of Statistics showed on Monday.


Newsweek
15 minutes ago
- Newsweek
Donald Trump Says China 'Not Easy' As Trade Talks Kick Off
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. President Donald Trump has described China as "not easy" to deal with, but touted progress between the two countries as negotiations go into their second day. "We are doing well with China. China is not easy," Trump told reporters at the White House on Monday. "Now I'm only getting good reports," he added, referencing the U.S. delegation currently meeting with Chinese officials in London. "It's a little early, but they'll be calling in soon. In fact, probably when I get back, I'll have my first call from them." On Monday, U.S. Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer met with Beijing's chief trade negotiator Vice Premier He Lifeng. Others in the Chinese delegation include Commerce Minister Wang Wentao and international trade negotiator Li Chenggang. In this photo released by Xinhua News Agency, Chinese Vice Premier He Lifeng, center right, and U.S. Treasury Secretary Scott Bessent, center left, pose for a group photo with delegations before their meeting to discuss... In this photo released by Xinhua News Agency, Chinese Vice Premier He Lifeng, center right, and U.S. Treasury Secretary Scott Bessent, center left, pose for a group photo with delegations before their meeting to discuss China-U.S. trade, in London, Monday, June 9, 2025. More Li Ying/Xinhua via AP Lutnick hailed the discussions as "fruitful," according to Bloomberg, while Bessent told reporters that the two delegations had a "good meeting." The talks may continue on Tuesday; China's Foreign Ministry has said that its delegation will be in the U.K. between June 8 and June 13. According to White House economist Kevin Hasset, Washington is seeking a "handshake" from Beijing, and the promise that the country will free up the flow of critical minerals to the U.S. "Our expectation is that after the handshake, immediately after the handshake, any export controls from the US will be eased and the rare earths will be released in volume and then we can go back to negotiating smaller matters," Hassett told CNBC ahead of the meetings on Monday. This is a developing story with updates to follow.


CNBC
15 minutes ago
- CNBC
'Collateral damage': Fund managers lobby Congress over Section 899 to avert foreign investors leaving the U.S.
American fund managers are lobbying Congress over a provision tucked inside President Donald Trump's tax bill that they say could lead to foreign investors "quickly" pulling investments out of the U.S. The "One Big Beautiful Bill Act," which passed through the U.S. House of Representatives in May, aims to penalize foreign-owned firms operating in the U.S. and that are from countries with "unfair foreign taxes" under a provision known as Section 899. It is currently being considered by the Senate. The Investment Company Institute (ICI), which represents fund houses in the U.S., is lobbying Congress for an amendment as it warns the bill in its current form also impacts most foreign investments in U.S. stock markets, according to documents seen by CNBC. "In order to avoid the impact of section 899, portfolio investors are likely to retreat quickly from US equities, leading to capital outflows from the United States," the ICI said in a letter sent to Senator Mike Crapo, the chairman of the Senate Finance Committee, on June 5. "If sustained selling by foreign investors depresses US equity markets, this would harm both US companies and investors." Section 899 aims to introduce retaliatory tax measures against entities from countries that have levies such as the Digital Services Taxes and the OECD's global minimum tax rules. If signed into law, it could impact investors from the European Union, the United Kingdom, Canada, Australia, and Switzerland, among others. The tax would start at 5% and escalate by five percentage points annually to a maximum of 20%, on top of existing taxes, which vary by country and tax treaties. That could dent returns for foreign investors in U.S. equities. In the letter, the ICI also suggests that the U.S. fund management industry, which has collectively invested around $18 trillion in U.S. stock markets, would be "collateral damage" due to the impact of Section 899. "We do believe, however, that the current drafting of proposed section 899 should clarify its scope and avoid discouraging foreign investment in US equity markets through 'investment funds' such as US mutual funds and ETFs and their foreign counterparts (e.g., UCITS funds)," the ICI said. The letter to Senators goes on to say, "section 899 would penalize these funds and their shareholders by taxing passive income from US equity investments. To this end, investment funds would be collateral damage to the intended focus of section 899." Funds typically charge fees as a percentage of assets under management, and a withdrawal by foreign investors, over Section 899 concerns, could lead to lower earnings for the investment management firm. The Senate Finance Committee declined to comment, and Senator Mike Crapo's office did not respond to CNBC's request for comment. Foreign investors own $19 trillion in the U.S. stock markets, $7 trillion in U.S. government bonds, and $5 trillion in U.S. credit, according to data compiled by Apollo Global Management. The ICI said it's largely in support of the U.S. government's attempt to "protect US business interests overseas and to address discriminatory foreign taxes." However, it cautions that the current draft of the bill does the opposite. "Some foreign governments may actually cheer this capital flight from the United States because it benefits their local equity markets, which is not the behavioral incentive that Section 899 seeks to achieve," it said. Yuri Khodjamirian, chief investment officer for Tema ETFs, said investors in Europe who are focused on dividend-distributing U.S. companies would be "thinking quite carefully" about their holdings at this stage. "If suddenly you have to pay tax on that income, why would you hold that?" Khodjamirian questioned. Tema ETFs runs the American Reshoring ETF that is available to both U.S. and foreign investors. Tax experts suggest earnings paid out to foreign investors are more likely to be hit by Section 899 than capital gains and other methods of shareholder distributions. The Tema ETFs investment chief cautioned that the impact on the U.S. equities market would be relatively minimal as U.S. companies, say in the S&P 500, are typically not known for their dividends. "In the US, dividend yields are quite low. There's not a lot of companies paying. And most of the capital gets returned to share buybacks," Khodjamirian told CNBC. "Is that actually going to be that big of an issue then?"