LONDON: The United States and China continued their trade talks for a second day in London on Tuesday, with both sides sending positive signals that a resolution to the ongoing trade war could be within reach. US Commerce Secretary Howard Lutnick described the talks as “going well” and expected them to last the entire day.
Global stock markets remained subdued, with investors awaiting developments in the negotiations, which aim to solidify a fragile truce. Kathleen Brooks, research director at XTB, noted that the absence of positive news had put pressure on stocks and the dollar. However, top US economic adviser Kevin Hassett expressed confidence, saying he expected “a big, strong handshake” after the talks, referring to potential concessions on both sides.
Discussions are focused on China’s export of rare earth minerals, essential for technology such as smartphones and electric vehicle batteries. The Geneva talks last month had brought a temporary reduction in tariffs, but Beijing’s slow release of supplies and other issues continued to hinder progress.
While optimism remains, analysts have cautioned that a complete easing of tensions may be unlikely. Despite progress, experts like Thomas Mathews of Capital Economics remain cautious, suggesting that the US may not completely back down on tariffs, which could limit any rally in markets.
China’s President Xi Jinping also sought international support, meeting with South Korea’s new President Lee Jae-myung to discuss free trade and global supply chain stability.
The ongoing negotiations are seen as crucial for both nations, with the US delegation led by Treasury Secretary Scott Bessent, while the Chinese team is headed by Vice Premier He Lifeng.
