US-China trade talks resume in London amid rare earth supply concerns – India Today
US and China Reach Preliminary Trade Deal in London
In a major diplomatic development, the United States and China have agreed on a new trade framework during talks held in London. According to U.S. Commerce Secretary Howard Lutnick, the agreement includes an implementation plan that could resolve long-standing restrictions on rare earths and magnets.
From China’s side, Vice Commerce Minister Li Chenggang confirmed that both nations had reached a consensus based on previous discussions in Geneva. The agreed plan will now be reviewed by the top leadership in both countries.
Market Response: Cautious Optimism Amid Uncertainty
Despite the agreement, global markets showed limited movement. The S&P 500 futures dipped 0.3%, reflecting investor caution as markets await more clarity on the specifics.
Key Reactions:
- Chris Weston, Head of Research at Pepperstone, noted:
“The lack of market reaction suggests the outcome was expected. Details—particularly on rare earths and U.S. chip exports—will be critical.”
- Lin Gengwei, CEO of Rain Tree Partners, commented:
“This is a temporary step forward. But deep-rooted US-China trade tensions remain.”
- Mark Dong, Co-founder of Minority Asset Management, added:
“This deal sets a bottom line. Neither side is willing to escalate further, which is a positive sign for reducing the trade imbalance.”
Chips, Tariffs, and Tech: The Bigger Picture
One of the most sensitive issues remains U.S. restrictions on chip exports to China. Analysts suggest the U.S. may ease these limits under pressure from both domestic chip manufacturers and Beijing.
- Carol Kong, Currency Strategist at Commonwealth Bank of Australia, warned:
“While talks are ongoing, a comprehensive US-China trade deal will take time. Market optimism may be premature.”
- Ray Attrill, FX Strategist at National Australia Bank, said:
“This feels like a handshake, not a solid agreement. Trust needs to be rebuilt between Presidents Xi and Trump.”
- Tony Sycamore, Market Analyst at IG, noted:
“If Geneva terms are followed, we could see US tariffs on Chinese goods remain at 30%, and Chinese tariffs at 10%—a big improvement from the earlier highs of 145% and 125%.”
Looking Ahead: What’s Next for the Global Economy?
Despite the diplomatic breakthrough, analysts remain divided on the long-term impact:
- Optimists believe the agreement could boost equity markets and ease currency volatility.
- Skeptics worry about repeated backtracking, and believe a worsening global tariff environment could still hurt international growth.
Summary Points:
- Rare earth trade restrictions may ease, benefiting tech and EV sectors.
- Chip export rules could be relaxed, but complete removal remains unlikely.
- Tariff levels may be lowered, but no full rollback confirmed yet.
- Market reaction is muted, reflecting a wait-and-watch sentiment.
- Global trade uncertainty continues, especially as the U.S. election nears.
Conclusion: A Step Forward, But the Road Is Long
The US-China trade talks in London mark a cautiously optimistic phase in global trade relations. While some market players see this as progress, others are reserving judgment until more concrete actions follow.
🔔 Stay updated on trade deals, market trends, and global economic shifts. Subscribe to our newsletter now and never miss a critical update.
#USChinaTrade #RareEarths #TradeDeal2025 #ChipExports #GlobalMarkets