USA and China: Historic meeting in London on the trade crisis!

USA and China: Historic meeting in London on the trade crisis!

China and the US are currently holding talks in London about their ongoing trade dispute. The first day of the trial took place in the historic Lancaster House and has now concluded. Both sides have said they want to remain in touch and talks are expected to continue this morning, London time. High-ranking representatives are taking part in the negotiations: US Treasury Secretary Scott Bessent, Trade Minister Howard Lutnick as well as China's Vice Prime Minister He Lifeng and Trade Minister Wang Wentao. Official interim results have not yet been published.

US economic advisor Kevin Hasset expressed the expectation of a short but positive meeting that would end with a “strong handshake”. US President Donald Trump is optimistic and said that the US is getting along well with China and is only receiving positive reports. A month ago in Geneva, both sides agreed to a 90-day break in the customs dispute and reduced tariffs on certain goods. However, the main contentious issue in the current negotiations continues to be trade restrictions.

Trade conflict and rare earths

Of particular concern are China's export controls on rare earths, which are important to the United States and other nations. China produces around 70 percent of the rare earths mined worldwide and has a monopoly in some areas. The Bayan Obo mine in Inner Mongolia is one of the largest mining sites for these critical raw materials. Last year, Germany imported around two thirds of its rare earths from China, which illustrates its dependence on this key raw material.

As part of the negotiations, Washington is seeking to ease trade restrictions. In return, the US may be willing to reconsider its restrictions in areas such as computer chips or aircraft components. The trade conflict affects not only goods, but also critical technologies, including US regulations for high-tech chips. Washington is trying to cut off China's access to the latest semiconductors.

Economic impact

The Kiel Institute for the World Economy warns that US products could become more expensive as a result of the trade dispute and estimates that the US economy could decline by 1.6 percent. In addition, dealers in China are reporting increasing orders from the USA, but concerns remain about possible declines in sales due to the prolonged customs dispute. Negotiations between the two economic powers are scheduled to last until mid-August, and both countries are using tactics of increased tariffs and direct negotiations against each other.

The latest developments show the complexity of the trade conflict and the continued tense relationship between China and the US as the global economy continues to wait for a solution.