US, China begin key trade talks in London

China and the United States have begun a new round of trade talks in London, as the world’s two biggest economies seek to shore up a shaky truce after tariffs chaos.

China and the United States began a new round of trade talks in London on Monday, Beijing’s state media reported, as the world’s two biggest economies seek to shore up a shaky truce after bruising tit-for-tat tariffs.

The two sides are meeting in the historic Lancaster House, run by the UK Foreign Office, following a first round of talks in Geneva last month.

Chinese Vice Premier He Lifeng was again heading the team in London. Chinese state news agency Xinhua reported the start of the talks.

Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer are leading the US delegation, President Donald Trump said.

“The meeting should go very well,” Mr Trump said on his Truth Social platform.

His press secretary, Karoline Leavitt, told Fox News: “We want China and the United States to continue moving forward with the agreement that was struck in Geneva.”

(L/R) US Trade Representative Jamieson Greer, US Secretary of Commerce Howard Lutnick, US Secretary of Treasury Scott Bessent, Chinese Vice Premier He Lifeng, Chinese Commerce Minister Wang Wentao, and Chinese International Trade Representative and Vice Minister of Commerce Li Chenggang. Picture: AFP

While the UK government reiterated that it was not involved in the discussions, a spokesperson said: “We are a nation that champions free trade.”

UK authorities “have always been clear that a trade war is in nobody’s interests, so we welcome these talks”, the spokesperson added.

The talks in London come just a few days after Mr Trump and Chinese President Xi Jinping finally held their first publicly announced telephone talks since the Republican returned to the White House.

Mr Trump said the call reached a “very positive conclusion”, while Xi was quoted by Xinhua as saying “correcting the course of the big ship of Sino-US relations requires us to steer well and set the direction”.

Tensions between the two nations have soared, with President Trump accusing Beijing of violating a tariff de-escalation deal reached in Geneva in mid-May.

“We need China to comply with their side of the deal. And so that’s what the trade team will be discussing tomorrow,” Ms Leavitt said on Sunday.

US and Chinese flags prior to meeting to discuss trade relations and tariffs. Picture: AFP

A key issue will be Beijing’s shipments of rare earths - crucial to a range of goods including electric vehicle batteries and which have been a bone of contention for some time.

“Rare earth shipments from China to the US have slowed since President Trump’s ‘Liberation Day’ tariffs in April,” said Kathleen Brooks, research director at trading group XTB.

“The US wants these shipments to be reinstated, while China wants the US to rethink immigration curbs on students, restrictions on access to advanced technology including microchips, and to make it easier for Chinese tech providers to access US consumers,” she added.

In April, Mr Trump introduced sweeping worldwide tariffs that targeted China most heavily.

At one point, Washington hit Beijing with additional levies of 145 per cent on its goods, prompting China to respond with tariffs reaching 125 per cent on US goods.

After two days of talks in Switzerland, both sides agreed to slash the eye-watering tariffs for 90 days, but key differences remain - especially over China’s rare earth export restrictions.

The impact was reflected in the latest official export data released Monday in Beijing.

Exports to the United States fell 12.7 per cent in May from the previous month, with China shipping US$28.8 billion worth of goods.

This was down from US$33 billion in April, according to Beijing’s General Administration of Customs.

According to a spokesperson for Prime Minister Starmer, Britain’s finance minister Rachel Reeves took advantage of the talks in London to meet with her US counterpart Scott Bessent and Chinese Vice Premier He Lifeng on Sunday.

Originally published as US, China begin key trade talks in London