US-China handshake in London? Negotiators inch toward deal over rare earths, tech exports

Top officials from the US and China will continue their meeting on Tuesday over an array of bilateral agreements, including the rare earth deal. The engagements began in London yesterday (June 10) as the two countries seek to sort out differences over Trump’s tariffs.

The talks are being led by China’s Vice Premier He Lifeng, alongside US Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer.

According to a report by The Washington Post, the US president has authorised Bessent’s team to remove restrictions on the sales of chipmaking software, jet engine parts and ethane.

‘Expecting handshakes’

In an interview with American outlet CNBC, Kevin Hassett, Director of the National Economic Council at the White House, on Monday said that the US expectation was that “immediately after the handshake, any export controls from the US will be eased, and the rare earths will be released in volume, and then we can go back to negotiating smaller matters."

A deal to ease restrictions on critical minerals and advanced technologies would mark a major shift in the ongoing US-China economic and tech rivalry.

Meanwhile, Trump has reportedly described Monday’s talks as “good”.

US-China trade tensions

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.

Throughout its talks with Washington, China has also launched discussions with other trading partners – including Japan and South Korea – to try to build a united front to counter Trump’s tariffs.

With inputs from agencies