Highlights

• Top U.S. and Chinese officials meet in London to discuss:
  • Trade tensions
  • Rare earth export restrictions
  • Potential tariff modifications
• China controls over 90% of global rare earth magnet production
• Exports to the U.S. fell 34% in May
• Negotiations aim to address:
  • Supply chain disruptions
  • Strategic trade dependencies between the two nations

High-stakes U.S.–China trade negotiations resumed in London today as top officials from both nations confront growing tensions over tariffs and rare earth supply chains. The meetings come amid an uneasy truce following a federal court ruling that cast doubt on the legality of Trump-era tariffs.

Led by Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, the U.S. delegation is seeking to secure Chinese commitments on trade access and the export of rare earth elements. Vice Premier He Lifeng heads China’s delegation. Negotiators face mounting pressure as rare earth magnet shortages grip global industries—from defense to EVs—due to Beijing’s April export licensing restrictions.

Rare Earth Exchanges (REEx) reported yesterday that the Chinese team was already in London.

According to The New York Times (opens in a new tab), China’s rare earth exports to the U.S. fell over 34% in May, the steepest drop since 2020. Factories in the U.S., Europe, and Japan are reportedly nearing critical shortages of rare earth magnets, for which China controls more than 90% of global production.

The Trump administration wants China to restore rare earth shipments to pre-April levels, while simultaneously pushing to make certain tariffs permanent. Meanwhile, China is demanding that the U.S. lift restrictions on Chinese students and tech imports and urging the EU to roll back electric vehicle tariffs.

A phone call last week between Presidents Trump and Xi reportedly eased tensions, but legal uncertainty persists. A U.S. appeals court is reviewing the legality of current tariffs, weakening Washington’s leverage.

Rare Earth Exchanges Takeaway

The rare earth impasse has become a central flashpoint in the broader trade war. Unless both sides offer meaningful concessions, critical materials supply chains may face prolonged disruption, just as Western industries race to rebuild strategic independence.