Top US and Chinese officials will continue trade talks in London on June 10, focusing on export controls that affect global supply chains and economic growth.

The meeting at Lancaster House follows a preliminary agreement in Geneva last month.

Tensions have resurfaced after the US accused China of blocking exports critical to sectors like semiconductors, aerospace, and defense.

In May, China’s exports to the US dropped by 34.5%, the steepest decline since early Covid-19.

The US delegation includes Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer.

China’s team is led by Vice Premier He Lifeng, Commerce Minister Wang Wentao, and International Trade Representative Li Chenggang.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ The strategic significance of rare earths in US-China relations extends beyond current tensions

China currently dominates the rare earth elements (REE) market, controlling 40% of global demand and 58% of mine production, creating significant supply chain vulnerabilities for the U.S. and other countries 1.

The economic stakes are substantial, as the Department of Defense estimates that a six-month disruption to REE supplies could cost the U.S. military alone $1.75 billion 1.

China’s exports of rare earth metals decreased by 59% from 2022 to 2023, dropping from historical highs to $764 million, indicating a strategic shift toward prioritizing domestic use 1.

The current negotiations reflect a broader concern about critical minerals that has evolved from a trade issue into a national security priority, particularly as clean energy transitions accelerate demand for these materials.

These talks come at a time when dysprosium, a critical rare earth element for high-performance magnets, is projected to reach $1,100/kg by 2034, nearly doubling current prices due to soaring demand from electric vehicles and other clean technologies 2.

2️⃣ Historical patterns show US-China trade relations have always been cyclical

Today’s tensions mirror historical patterns dating back to the inaugural U.S. trade with China in 1784, when the “Empress of China” ship established commercial relations that have alternated between cooperation and conflict for over two centuries 3.