Top US and Chinese officials are meeting in London on Monday in the hope of making further progress in easing the trade war between the world’s two largest economies.
The eyes of global financial market investors are firmly on the outcome of the discussions, given the damage already inflicted by the spat and wider US-led trade war.
The US delegation is led by Treasury secretary Scott Bessent while China‘s vice premier He Lifeng – a respected negotiator at the top of the Chinese government – will represent his country.
The venue has not been disclosed.
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It is hoped the talks will build on the preliminary agreement struck in Geneva that removed the effective trade embargo between the two nations.
That deal amounted to a 90-day reduction in effective tariff rates above 100% to allow for further talks.
A phone conversation between Donald Trump and his Chinese counterpart Xi Jinping last week set the scene for Monday’s negotiations.
Mr Trump later said that Xi had agreed to resume shipments to the US of rare earths minerals and magnets.
They had been suspended by Beijing in response to Mr Trump’s tariffs and were seen as an effective tool in getting the US to talk due to the havoc it inflicted on supply chains central to many American manufacturers – the very sector the US president is trying to bolster through his “America first” agenda.
It emerged on Monday morning that Boeing had resumed shipments of planes to Chinese customers.
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Mr Trump has described the status of the negotiations as “very far advanced” but China, in its own remarks, has been more critical of the US position.
A Chinese government readout of the Trump-Xi conversation said the Chinese premier had told his US counterpart to back down from inflicting further hurt to the global economy.
The trade war to date has damaged growth widely, with official US figures showing a sharp slowdown in the first quarter of the year – before the worst of the tariff regime had even been announced.
Data out of China on Monday showed deflationary pressures had deepened as factory gate prices – an important signal on future price growth – slid further into negative territory during May as demand for goods continued to drag.
Customs data had already showed that China’s exports to the US – its biggest single market – slumped by 34.5% year-on-year during May in value terms.
That was up from a 21% drop the previous month.
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White House spokeswoman Karoline Leavitt told Fox News: “We want China and the United States to continue moving forward with the agreement that was struck in Geneva.
“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.”
A UK government spokesperson said of hosting the negotiations: “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.”
