On Tuesday, June 10th, the US Secretary of Commerce, Howard Lutnick, revealed that the trade negotiations with China are progressing smoothly. The second round of trade talks between the US and China began on Monday in London, focusing on export controls.
Upon arriving at Lancaster House in London, Lutnick told reporters, “Negotiations took place all day yesterday, and I expect it to continue all day today.”
“The negotiations are progressing well, and we have spent a lot of time together,” he added.
In the first round of talks held in Geneva in May, both sides agreed to refrain from significant tariff reductions, temporarily pausing the trade war. Currently, they are seeking to reach an agreement, with the US aiming for a rare earth export deal and Beijing hoping for relaxed semiconductor export controls.
The negotiations in London lasted over 6 hours on the first day and concluded around 8 pm London time on Monday. The second day of talks began at 10 am on Tuesday London time.
US President Trump mentioned during a White House briefing on Monday that the trade negotiations with China were progressing well but also acknowledged the difficulty of negotiating with the Chinese government. He mentioned that the US negotiating team would call him to update on the progress.
“We want to open up China. If we don’t open up China, perhaps we won’t do anything. But we want to open up China, which is a great thing for China and other countries around the world,” Trump stated.
When asked about US exports controls on China, Trump commented, “We will see, we will see. China (CCP) has been exploiting the US for years. No one has charged them 10 cents. No president has had the courage to charge China anything, for whatever reason. They don’t want to do that.”
White House economic advisor Kevin Hassett stated on Monday that if China speeds up the delivery of rare earths and magnets, the US could potentially lift recent export controls on items like semiconductors.
Following the first round of US-China trade talks in May, due to China’s violation of commitments by continuing to restrict rare earth exports, the US responded with multiple export controls, including on items such as chips, ethane, and aerospace equipment. After a call between Trump and Chinese leader Xi Jinping last week, the second round of US-China trade talks was scheduled.
Recent data released by Chinese customs in May showed a dramatic 34.5% drop in Chinese exports to the US, the largest decline since the outbreak of the COVID pandemic.
Thus far, tariffs have had minimal impact on US inflation and the job market, though the pressure on the US dollar has increased.
The US delegation in the London talks was led by US Treasury Secretary Scott Bessent, Lutnick, and US Trade Representative Jamieson Greer. The Chinese delegation was led by Vice Premier of the State Council He Lifeng, including Chinese Minister of Commerce Wang Wentao and the Deputy Minister of Commerce and International Trade Negotiations Representative Li Chenggang.
Lutnick, who heads the Department of Commerce responsible for overseeing US export controls, indicated that rare earths have become a crucial topic of discussion in this round of talks. Lutnick did not attend the talks in Geneva.
Hassett mentioned that once an agreement is reached in London, the US will relax the latest export controls, while China will release rare earths in bulk. However, he specified that any easing measures would not include “very high-end Nvidia products.” He referred to Nvidia’s advanced artificial intelligence chips, which are banned from being sold to China due to concerns over their potential military applications.
He stated, “I’m talking about very important semiconductor export controls for them (China).”
(Translated and adapted from a report by Reuters)