Implementing the consensus from the leaders' call, focusing on tariffs, technology, and rare earths, the China-U.S. economic and trade consultations are held today in London

On the 7th, a spokesperson for the Chinese Ministry of Foreign Affairs announced that, at the invitation of the British government, He Lifeng, a member of the Political Bureau of the Central Committee of the Communist Party of China and Vice Premier of the State Council, will visit the UK from June 8 to 13. During this period, the first meeting of the China-U.S. economic and trade consultation mechanism will be held with the U.S. side. U.S. President Trump also posted on social media on the 6th local time, stating that U.S. Treasury Secretary Mnuchin, Commerce Secretary Ross, and Trade Representative Lighthizer will hold talks with Chinese representatives in London on the 9th. This is the second economic and trade consultation held by both sides since the outbreak of the U.S.-China tariff war. After reaching a consensus in Geneva on May 12, the Chinese side has seriously and earnestly implemented the agreement, while the U.S. side has taken negative measures to impose further restrictions on Chinese chip products. Several Chinese experts interviewed by the Global Times on the 8th stated that this consultation was directly promoted by the recent phone call between the leaders of China and the U.S., indicating that both sides hope to find effective ways to resolve obstacles in their relationship through continuous dialogue and in-depth consultations. Regarding the U.S. side's hype about China's rare earth export controls while remaining silent on the extreme suppression measures against China, these experts emphasized that the China-U.S. economic and trade negotiations must adhere to an equal attitude and respect each other's concerns; only in this way can a win-win outcome be achieved.

"Global Market Highly Concerned"

According to a report by Singapore's Lianhe Zaobao on the 8th, less than two days after the phone call between the leaders of China and the U.S. on June 5, U.S. President Trump took the lead in announcing on social media on the 6th that U.S. economic and trade officials would hold talks with Chinese representatives in London on Monday (June 9). Trump also stated, "The talks should go smoothly." The report noted that the economic and trade consultations between China and the U.S. in London will focus on issues such as tariffs, technology, and rare earths.

Radio France Internationale stated that the resumption of a new round of economic and trade consultations between China and the U.S. aims to resolve trade disputes between the two major global economies and has attracted significant attention from the global market.

Reuters reported that this consultation comes amid ongoing trade tensions between China and the U.S. Over the past few weeks. On May 12, the high-level economic and trade talks in Geneva between China and the U.S. reached a consensus on significantly reducing bilateral tariffs, leading to a strong rebound in global stock markets. However, the report noted that the temporary agreement reached in Geneva did not address deeper issues in the bilateral economic and trade relationship. After the Geneva talks, the U.S. further strengthened export controls against China in areas such as artificial intelligence and advanced chips. This drew harsh criticism from the Chinese Ministry of Commerce, which stated that it "deprives other countries of the right to develop advanced computing chips and high-tech industries such as artificial intelligence." At the same time, China's export control measures on rare earths have raised concerns in the U.S. about the impact on related industries.

The Associated Press reported that as these disputes severely impact bilateral relations and threaten the fragile tariff agreement between the two sides, the leaders of China and the U.S. held a phone call on June 5, during which both heads of state agreed that their teams would continue to implement the Geneva consensus and hold a new round of talks as soon as possible.

Song Guoyou, deputy director of the U.S. Studies Center at Fudan University, stated in an interview with the Global Times on the 8th that the first meeting of the economic and trade consultation mechanism held by China and the U.S. in London was directly promoted by the phone call between the leaders of the two countries, making future China-U.S. economic and trade consultations more stable and systematic. This consultation will help further clarify the cognitive differences that exist between China and the U.S. after the high-level economic and trade talks in GenevaLi Haidong, a professor at the China Foreign Affairs University, told a Global Times reporter on the 8th that this consultation aims to implement the consensus reached during the phone call between the Chinese and U.S. heads of state, with the goal of gradually alleviating a series of issues in the economic and trade fields through ongoing negotiations. This indicates a mutual need for dialogue and coordination to stabilize bilateral relations after significant setbacks in areas such as economics and trade. He believes that compared to the Geneva talks, the range of U.S. negotiating representatives is broader, suggesting that the topics discussed will also be more extensive.

Regarding this China-U.S. economic and trade consultation, the host country, the United Kingdom, is clearly excited. "The UK has achieved a diplomatic victory in hosting the China-U.S. trade negotiations," reported Sky News. The fact that the world's two largest economies are holding economic and trade consultations in London is seen as a "diplomatic victory" for the host country. In addition to its convenient geographical location, UK government sources indicate that the current geopolitical advantages allow the UK to act as a bridge and facilitator: on one hand, UK-China relations are in a "reboot" phase; on the other hand, importantly, this could greatly assist the UK in seeking a trade agreement with the U.S. to eliminate or significantly reduce (the tariffs imposed by the U.S.).

Urging the U.S. to Lift "Negative Measures"

International media have noted that, unlike the China-U.S. Geneva talks, this time Trump announced that Commerce Secretary Wilbur Ross would participate in the China-U.S. economic and trade consultations in London alongside Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer. CNN reported that since the U.S. Department of Commerce's Bureau of Industry and Security is responsible for overseeing export controls, U.S. technology export restrictions on China may become an important topic in this round of consultations. Analysts suggest that U.S. technology export controls "may no longer be a non-negotiable area."

Bloomberg reported that Ross's participation in the new round of consultations may indicate the U.S. side's willingness to reconsider some technology restrictions that hinder China's long-term growth goals. However, the South China Morning Post believes that Ross has consistently supported high tariffs, and U.S. Trade Representative Lighthizer has close ties with the hardline former trade representative Robert Lighthizer, suggesting he will also take a tough stance on tariff issues. The inclusion of these two in the U.S. negotiating team may pose a daunting task for this China-U.S. economic and trade consultation.

Just as the China-U.S. economic and trade consultations are about to take place, Reuters reported on the 6th that, according to four informed sources, the U.S. Department of Commerce has issued a ban to companies, suspending licenses for U.S. nuclear equipment suppliers to sell products to Chinese nuclear power plants. In response, a spokesperson for the Chinese Embassy in the U.S. stated that during the phone call between the two heads of state, it was emphasized that both sides should earnestly implement the agreement reached on May 12 in Geneva. The Chinese side has been "seriously" implementing this agreement, and the restrictions on U.S. rare earth exports comply with international practices and are not targeted at specific countries. The statement emphasized that "the U.S. side should recognize the progress made and lift the negative measures taken against the Chinese side."

Regarding this London economic and trade consultation, the U.S. side has previously complained and emphasized China's rare earth export controls, but has rarely mentioned the U.S. restrictions on China's chip, artificial intelligence, and other technology industries following the Geneva talks. In fact, on the same day that the news of the China-U.S. London economic and trade consultation was announced, the Chinese Ministry of Commerce stated that the export control measures for medium and heavy rare earths are in line with international practices due to their dual-use nature for military and civilian purposesA spokesperson stated that China, as a responsible major country, fully considers the reasonable needs and concerns of various countries in the civilian sector, and reviews export license applications for rare earth-related items in accordance with laws and regulations. A certain number of compliant applications have been approved according to the law, and efforts to strengthen the approval process for compliant applications will continue. China is willing to further enhance communication and dialogue on export controls with relevant countries to facilitate compliant trade.

“(The U.S. uses) chips to besiege China, (China uses) rare earths to counter the U.S.” The Singapore Lianhe Zaobao reported that the trade war between China and the U.S. has sparked a "rare earth vs. chips" silent war, highlighting the key leverage of technology and resources in the great power game. The report cited analyses from scholars in multiple countries stating that China's "rare earth card" has certainly hit the U.S. "vital point," otherwise Washington would not be eager to negotiate with China in Geneva, only to later complain in frustration about the impending shortage of rare earths. A major example is that U.S. automakers recently complained about a shortage of rare earth magnets leading to near shutdowns of their factories, while the only operating rare earth mine in California, Mountain Pass, has had to export rare earths to China for refining.

Bloomberg quoted an assessment from Kooms, deputy director of the consulting firm specializing in international supply chains, stating that the U.S. will need at least another 10 years to break free from its dependence on Chinese rare earths, while Chinese companies have already developed effective alternatives for most U.S. chips, indicating that "China is making progress in this confrontation."

U.S. Companies in China Refuse to Return to the U.S.

Despite some individuals in the U.S. recently making small moves to show a tough stance ahead of this round of economic and trade negotiations, many American companies in China are unwilling to return to the U.S. The Hong Kong South China Morning Post reported on the 6th that the latest survey by the American Chamber of Commerce in China shows that U.S. tariffs on China have put many American companies operating in China in a difficult position. At the same time, the U.S. government's attempt to promote the return of manufacturing through tariffs is likely to fail. The report stated that despite facing challenges, most surveyed American companies do not plan to exit China. The American Chamber of Commerce in China stated in a release: "On the contrary, they are localizing operations in China or shifting some production to third countries, with no company reporting plans to move production back to the U.S." The survey was conducted from May 23 to 28 and received responses from 112 American companies operating in China across various industries.

Li Haidong stated that the U.S. still harbors unhealthy thinking aimed at limiting the development rights and space of its negotiating counterpart. For China-U.S. economic and trade negotiations to achieve a win-win outcome, it is essential to uphold an equal attitude, respect each other's concerns, and cooperate mutually.

On the 6th, the Chinese Embassy in the U.S. held a "Tea and the World: Harmony between East and West" event. Chinese Ambassador to the U.S. Xie Feng stated that neither a cold war nor a trade war can be fought or won, and that economic decoupling or cultural decoupling will not gain public support and will not succeed. Xie Feng emphasized that current China-U.S. relations are at a critical historical juncture. He hopes that the U.S. side will work with China to implement the important consensus reached during the phone call between the two heads of state, revoke erroneous measures against China, and create necessary conditions for China-U.S. relations to return to the right track. He hopes that insightful individuals from both countries will voice objective and rational opinions, build bridges for communication and cooperation, and play a positive role in stabilizing and sustainably developing China-U.S. relationsRisk Warning and Disclaimer

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