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    Rare Earths In Spotlight As US-China Trade Negotiations Enter Day Two In London

    1 week ago

    High-level trade discussions between the United States and China will resume for the second day in London on Tuesday, as both sides attempt to resolve escalating tensions around export controls, particularly those affecting rare earth materials.

    The renewed talks, hosted at Lancaster House, follow initial discussions held on Monday and come amid mounting concerns over the stability of global supply chains and broader economic uncertainty, reported Reuters.

    At the center of the negotiations are rare earths—vital components in electric vehicles, aerospace, semiconductors, and defense technologies. Washington has accused Beijing of stifling the export of these strategic materials, igniting fears of a prolonged disruption in industries heavily dependent on them. While a preliminary 90-day trade agreement reached in Geneva last month had offered some relief, recent developments have rekindled investor anxiety.

    Rare Earth Exports In Focus

    New customs data from China underscored the stakes involved, revealing that exports to the United States plummeted by 34.5 per cent in May. This marked the most severe decline since the early months of the COVID-19 pandemic in February 2020. Although the US economy has not yet seen significant fallout in inflation or employment figures, the dollar remains under pressure amid ongoing trade tensions and domestic policy uncertainty.

    The American delegation in London includes US Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer. Lutnick’s presence is particularly notable, as his department is responsible for overseeing export controls—a signal of how pivotal rare earth supplies have become.

    Also Read : India-US Trade Pact May Unlock New Investment Avenues: Piyush Goyal

    Trump-Xi Jinping Act Friendly

    The latest round of talks comes shortly after a phone call between President Trump and Chinese President Xi Jinping—their first direct conversation since Trump took office on January 20. According to Trump, Xi has agreed to resume shipments of rare earth minerals and magnets to the US, and Reuters reported that China has granted temporary export licenses to suppliers serving America’s top three automakers.

    Still, the path ahead remains fraught with uncertainty. As factories around the world brace for possible shortages, the outcome of these London talks could prove crucial in determining how deeply the supply chain crisis will cut into global manufacturing and growth.

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