After US-China talks in London: tight lips, concern and a tactical turning point?

South China Morning Post

6 hours ago

With global economic ramifications on the line, those with a vested interest in supply chains and geopolitical stability watched closely and waited as high-ranking officials from the United States and China emerged from last week's trade talks in London.
Then, the public was told little. In the absence of an official readout from both sides, hope for a bit more clarity has given way to a fog of questions and buzzy speculation about what happened behind those doors.
Was leverage being applied? By whom and in what manner? And what does this perceived stand-off mean, not just for the two economic giants, but for a world desperate for direction?
The silence, some say, hints at tensions, recalibrated power and the fragile balance of global trade, deepening uncertainty about the world's most consequential economic relationship.
'This round of negotiations could mark a turning point in the US-China trade war,' said Tao Dong, president and chief economist at Springs Capital (Hong Kong), in an op-ed published on Sunday by the New Economist think tank.
China's hardball tactics around export controls on rare earth elements – the main focus of the closed-door London talks – perhaps caught the US delegation off guard and added a new layer of tension and complication to already fragile discussions, Tao said.
'The dynamic has shifted from unilateral US pressure to a more evenly matched contest – China is no longer on the defensive and is now negotiating from a position of strength. Second, the focus has moved from tariff levels to export controls – tariffs themselves are now secondary; both sides are targeting choke points in each other's supply chains, which is why commerce ministers, rather than just trade officials, are now at the table,' Tao wrote.