Market News

BY Alexandra BACON with Beiyi SEOW in Washington and Matthew WALSH in Beijing

United States and Chinese officials are set to meet Tuesday for a second day of trade talks in London, seeking to shore up a shaky tariff truce in a spat further strained by export curbs.

The gathering of key officials from the world's two biggest economies began Monday in the historic Lancaster House, run by the UK Foreign Office, following an earlier round of talks in Geneva last month.

Chinese Vice Premier He Lifeng was again heading the team in London, which included Commerce Minister Wang Wentao and China International Trade Representative Li Chenggang.

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

A source familiar with negotiations told AFP that talks wrapped up Monday evening and are expected to restart Tuesday at 10:00 am local time (0900 GMT).

The London meeting came after Washington accused Beijing of violating their Geneva deal to de-escalate staggeringly high tariffs.

A key sticking point was the export of rare earths from China.

"In Geneva, we had agreed to lower tariffs on them, and they had agreed to release the magnets and rare earths that we need throughout the economy," Kevin Hassett, director of the White House's National Economic Council, told CNBC on Monday.

But even though Beijing was releasing some supplies, "it was going a lot slower than some companies believed was optimal," Hassett added.

This issue was raised last week in US President Donald Trump's first publicly announced telephone talks with Chinese President Xi Jinping since the Republican's return to the White House.

Trump said on his Truth Social platform that Thursday's long-awaited call reached a "very positive conclusion".

On Monday, the US leader told reporters that he was "only getting good reports" on the trade talks, adding: "We are doing well with China. China is not easy."

- US easing curbs? -

US official Hassett said he expected "a big, strong handshake" at the trade negotiations.

"Our expectation is that after the handshake," Hassett added, "any export controls from the US will be eased, and the rare earths will be released in volume."

Both sides can then "go back to negotiating smaller matters," he said.

Tensions between Washington and Beijing have soared since Trump took office, with both countries engaging in a tariffs war that took duties on each other's exports to three figures -- an effective trade embargo.

The Geneva pact to cool tensions temporarily brought new US tariffs on Chinese goods from 145 percent to 30 percent, and Chinese countermeasures from 125 percent to 10 percent.

But Trump recently said China "totally violated" the deal. A key issue was Beijing's shipments of rare earths, crucial to goods including electric vehicle batteries.

"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.