TLDR
- US and China continue trade talks Tuesday in London after six hours of Monday discussions focusing on rare earths and tech tensions
- US officials called Monday’s meeting “good” and “fruitful” while President Trump received “good reports” but said “China’s not easy”
- Trump doubled steel and aluminum tariffs from 25% to 50% effective June 4, with his 90-day pause on broader tariffs expiring early July
- Stock futures opened slightly lower Tuesday as investors remain cautious during ongoing trade negotiations
- Legal challenges continue over Trump’s sweeping tariffs after conflicting court rulings on their implementation
US and Chinese officials returned to the negotiating table Tuesday in London for a second day of trade discussions. The talks followed six hours of meetings on Monday between top officials from both countries.
Treasury Secretary Scott Bessent described Monday’s session as a “good meeting.” Commerce Secretary Howard Lutnick called the negotiations “fruitful” but provided few details on specific progress.
President Trump said he received “good reports” from the talks but cautioned that “China’s not easy.” Chinese Vice Premier He Lifeng, who led China’s delegation, did not make public comments about the discussions.
The negotiations focus primarily on tensions over rare earth minerals and technology trade. China has imposed export restrictions on rare earth materials that are essential for automotive and other industries.
The US has responded by tightening control over ethane exports. Bloomberg reported that Washington now requires export licenses for the gas used in plastic production, which China purchases in large quantities.
Recent Tariff Changes Take Effect
Trump implemented new tariff increases last week that doubled rates on steel and aluminum. The tariffs rose from 25% to 50% effective June 4.
These tariff increases come as Trump’s broader trade policy faces legal challenges. A federal appeals court allowed sweeping tariffs to remain temporarily in effect after a lower court blocked their implementation.
The US Court of International Trade had ruled the method used to enact the tariffs was “unlawful.” The legal dispute creates uncertainty around the administration’s trade enforcement mechanisms.
Trump has set a self-imposed 90-day pause on “reciprocal” tariffs that expires in early July. The White House sent letters to trading partners as a “friendly reminder” about the approaching deadline.
Markets React to Trade Uncertainty
Stock futures opened lower Tuesday as investors remained cautious about the ongoing negotiations. Dow Jones futures fell 1 point while S&P 500 futures traded flat.
Nasdaq 100 futures declined 0.1% as markets adopted a wait-and-see approach. Trading volumes remained light as investors avoided major moves during the talks.
The 10-year Treasury yield dropped 2 basis points to 4.46%. Gold prices fell 0.2% while the US Dollar Index gained 0.4% against other major currencies.
The London summit represents the latest attempt to address trade tensions between the world’s two largest economies. Previous negotiations in Geneva reached a mid-May truce that both sides have accused the other of violating.
Trump has pushed for faster progress on trade agreements with multiple countries. The administration has completed one deal with the United Kingdom while extending talks with India through Tuesday ahead of the July 9 deadline.
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