#USChinaTradeTalks

🔹 What’s Happening Right Now

• Top U.S. officials—including Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer—are meeting China’s delegation led by Vice Premier He Lifeng at Lancaster House to build upon the Geneva truce and hammer out further commitments.

• These negotiations will likely stretch into a second day, indicating deeper discussions rather than quick fixes.

🔹 Core Issues on the Table

1. Rare-earth Minerals

• A key focus: the U.S. is pressing China to ease export controls on rare‑earth metals, vital for tech and green industries; China has begun granting some export licenses.

• U.S. signaled it might loosen some semiconductor export restrictions in return.

2. Tariffs & Trade Flow

• High tariffs (up to 145 % U.S.—China 125 %) previously imposed have been temporarily reduced under a 90‑day suspension agreed in May.

• Despite relaxed duties, China’s May exports to the U.S. dropped ~35% year‑over‑year, and deflation is increasing domestic pressure.

🔹 Market & Strategic Implications

• Markets responded modestly—S&P 500 and Nasdaq ticked upward as investors viewed even dialogue as constructive.

• Leverage dynamics: The U.S. holds pressure using tariffs, but China counters via control over rare-earth supplies.

• Talks aim for incremental agreements (e.g., increased rare-earth shipments, semiconductor trade) rather than a sweeping deal.

✅ Why It Matters

• Global supply chains, especially in tech and automotive sectors, rely heavily on rare-earth materials.

• Economic stability: Both nations face economic strains—China from deflation and export slump, U.S. from consumer and business uncertainty.

• Geopolitical risk: These negotiations are closely tied to broader tech, security, and geopolitical strategies, including student visas and AI export controls.

🧭 Bottom Line

These are cautious, high-stakes negotiations building on a Geneva ceasefire. Expect practical, narrow progress