China and U.S. Hold First Meeting of Trade Consultation Mechanism in London

Chinese authorities announced last night that Vice Premier He Lifeng began the first meeting of the China-U.S. trade consultation mechanism with U.S. counterparts in London on Monday, June 9. Before the talks began, the White House signaled that the U.S. is seeking an agreement with China on rare earth exports, aiming to restore levels to those before China imposed export controls in early April. Several Chinese scholars noted that the U.S. heavily criticizes China's rare earth export restrictions while remaining silent on its own extreme measures against China. They emphasized that trade negotiations must respect mutual concerns to achieve a win-win outcome.

This London consultation follows the establishment of the China-U.S. trade consultation mechanism during talks in Geneva in May. The Chinese delegation is led by He Lifeng, who headed the Geneva talks, along with Commerce Minister Wang Wentao and Vice Minister of Commerce Li Chenggang. The U.S. delegation includes Treasury Secretary Becerra, Commerce Secretary Lutnick, and U.S. Trade Representative Greer. Sources indicate the meeting is expected to continue through Tuesday.

China’s Rare Earth Exports Rise 23%, U.S. Seeks Pre-Trade War Levels
According to CNN, Kevin Hassett, Director of the U.S. National Economic Council, expressed optimism on Sunday about reaching an agreement following the London talks. Hassett stated that the U.S. hopes China will restore rare earth exports to levels before the trade war escalated. He noted, “Although the pace of rare earth exports has slightly increased, it still falls short of the standards set in the Geneva agreement.”

After the U.S.-China tariff war began, China implemented export controls on certain rare earth-related items in early April as a countermeasure. Following a phone call last week between Chinese President Xi Jinping and U.S. President Trump, Trump suggested on social media that the issue of China’s rare earth exports to the U.S. had been resolved.

China’s General Administration of Customs released data before the London talks, showing that China’s rare earth exports in May reached 5,864.6 tons, a 23% increase from the previous month. Bloomberg reported that, despite being lower than the same period last year, this increase brought the cumulative export volume from January to May to 24,827 tons, up 2.3% year-on-year.

Trade Talks Amid Tensions Over Tariffs and Technology
Less than 30 days after a truce in the U.S.-China tariff war in mid-May, Washington announced a global chip ban targeting China and revoked visas for Chinese students, triggering a strong backlash from Beijing. In addition to rare earth controls, observers predict that the London talks will also focus on tariffs and technology issues.

China’s Global Times cited several Chinese experts who stated that this consultation was directly prompted by the phone call between the two countries’ leaders, signaling a mutual desire to find effective ways to resolve obstacles in bilateral relations through sustained dialogue and in-depth consultations. However, these experts noted that the U.S. exaggerates China’s rare earth export controls while ignoring its own aggressive measures against China. Li Haidong, a professor at the China Foreign Affairs University, observed that the broader range of U.S. negotiators compared to the Geneva talks indicates a wider scope of discussion topics. He added that the U.S. still harbors an unhealthy mindset aimed at restricting its negotiating partner’s development rights and space.

The Financial Times quoted analysts and business figures who pointed out that China’s recent rare earth export controls have tilted the balance of power in trade negotiations toward Beijing. Analysts suggest that China’s leverage in rare earth export controls could be replicated in other areas of high-tech supply chains, as both the U.S. and Europe have initiated and become entangled in trade disputes with China.