^{Photo: The Straits Times}

U.S. and China Reignite Trade Talks in London as Global Tensions Simmer

In a significant development for global trade, top-level officials from the United States and China are convening in London this week to attempt to resolve long-standing economic tensions that have disrupted supply chains, tech cooperation, and investor confidence over the past year.

On Monday, U.S. Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and U.S. Trade Representative Jamieson Greer sat down with Chinese Vice Premier He Lifeng, Beijing’s chief trade negotiator, for a high-stakes round of negotiations.

This meeting — part of the “China-U.S. Economic and Trade Consultation Mechanism” — is the most high-profile face-to-face exchange between the two powers since May’s temporary tariff reduction agreement in Geneva.

Background: A Fragile 90-Day Truce

Following months of economic escalation, both Washington and Beijing agreed last month to a 90-day tariff truce during emergency negotiations in Geneva. Key tariff reductions included:

• The U.S. cutting duties on Chinese imports from 145% to 30%
• China lowering tariffs on U.S. goods from 125% to 10%

This temporary rollback was aimed at clearing the path for deeper negotiations. But tensions remain high, as both sides accuse each other of undermining the agreement.

The U.S. claims China is stalling the export of key critical minerals, while China accuses the U.S. of tightening chip export rules and imposing additional visa restrictions on Chinese students and researchers.

What’s at Stake in London?

The stakes couldn’t be higher. With the global economy already grappling with supply chain bottlenecks, semiconductor shortages, and rising geopolitical fragmentation, the outcome of the London talks could shape international trade in the coming years.

According to White House Press Secretary Karoline Leavitt, the discussions will focus on implementing the Geneva accord, restoring trust between the two sides, and exploring cooperation in sectors such as:

• Critical minerals and rare earths
• Semiconductors
• Agricultural exports
• Artificial intelligence and data security

While no sweeping breakthroughs are expected, both governments recognize that failure to stabilize trade ties could deepen existing divisions across the global economic system.

Expert Views: A Strategic Power Play Beyond Tariffs

Economists and geopolitical analysts argue that the dispute between the world’s two largest economies is no longer just about trade—it’s about the future of global dominance in technology, AI, data flows, and defense.

“China and the U.S. are locked in an existential contest,” said Rebecca Harding, CEO of the Centre for Economic Security, in an interview with CNBC. “This goes far beyond tariffs. It’s about who defines the rules in a digital age where the role of the nation-state is increasingly blurred.”

Harding also highlighted China's expanding munitions production capacity, calling it a sign of how deeply economic, security, and technological interests are now intertwined.

Market Caution: No Quick Solutions Expected

Despite the high-profile nature of the talks, expectations remain cautious.

“I don’t really have very high hopes for a quick resolution,” said Zhiwei Zhang, President and Chief Economist at Pinpoint Asset Management. “There may be incremental progress — for instance, China has recently issued new permits for rare earth imports — but a comprehensive agreement seems unlikely in the near term.”

Zhang noted that the best-case scenario for now would be a roadmap for further meetings, possible sector-specific reliefs, or renewed commitments to uphold the Geneva framework.

Global Impact: Why the World Is Watching

The U.S.-China economic relationship represents over $700 billion in annual trade and serves as a foundation for countless global supply chains. Disruptions between the two not only affect manufacturing and agriculture, but also:

• Tech industries reliant on AI chips and semiconductors
• Green energy firms sourcing rare earths
• Academic institutions affected by visa limitations
• Financial markets, which remain sensitive to policy uncertainty

A First Step in a Long Road Ahead

While no final deal is expected to emerge from the London meetings, the willingness of both sides to return to the table signals a shared understanding of the global consequences of continued trade fragmentation.

This week’s talks may be just the beginning of a longer diplomatic process — one with immense implications not just for Washington and Beijing, but for the entire international economic system.