U.S. and China set for trade talks in London

The U.S. and China are set to meet in London on Monday to restart trade talks and try to ease tensions that have been hurting the global economy. Key U.S. officials like Commerce Secretary Howard Lutnick will sit down with Chinese leaders, including Vice Premier He Lifeng.

One of the main topics will be China's rare earth exports, materials crucial for making modern tech devices and China's ability to buy U.S. products like computer chips. Although the two countries agreed to a temporary pause in raising trade tariffs last month, both sides have accused each other of breaking that agreement.

The talks follow a phone call between U.S. President Donald Trump and Chinese President Xi Jinping, which Trump said was very positive. Xi reportedly asked the U.S. to cancel the harmful trade measures it had taken.

While the earlier talks helped lower some tariffs, big issues still remain, like China's control over rare earth exports and the U.S.'s technology restrictions on China, especially those linked to artificial intelligence.

Analysts say the U.S. is especially concerned because China produces about 69% of the world’s rare earth minerals, which are needed for many U.S. technologies. With both countries having major interests at stake, there's hope this round of talks could lead to progress.

Other U.S. officials, like Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer, will also join the meetings.

Earlier this year, Trump raised tariffs on many imports, hitting China the hardest. China responded with its own tariffs, leading to a trade war. Talks in May led to a short-term deal reducing some tariffs, but since then, both sides have accused the other of breaking the deal.

The U.S. says China didn't follow through on easing export limits for rare earth magnets, while China claims the U.S. blocked tech sales and visas for Chinese students.

Although China has started approving some rare earth exports, the U.S. says it's not happening fast enough. Meanwhile, the global economy is feeling the effects. The OECD has lowered its global growth forecast to 2.9%, blaming rising trade barriers.

New data shows that China's exports in May were slightly better than last year, but its imports dropped more than expected, another sign the trade war is affecting both countries' economies.

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