Trade talks between the US and China resumed on Tuesday after six hours of discussions between top officials in London on Monday. Tuesday’s talks are expected to continue to focus on easing tensions over rare earths and tech.
After day one, US officials were upbeat but vague on progress. Treasury Secretary Scott Bessent said it was a “good meeting,” while Commerce Secretary Howard Lutnick called the negotiations “fruitful.” President Trump said on Monday he received “good reports” but added that “China’s not easy.” Vice Premier He Lifeng, who led China’s delegation, did not comment on the meeting.
The negotiations follow Trump’s call with Xi Jinping last week, which both leaders framed as positive. US-China tensions have risen in the aftermath of the countries’ trade truce reached in mid-May in Geneva, with both countries accusing the other of breaching that truce while ratcheting up pressure on other issues.
The US and China are also now using their control over certain key materials to gain control in the trade war. Bloomberg reported on Friday that the US dominates in ethane, a gas used to make plastics, and China buys nearly all of it. Washington is now tightening control by requiring export licenses. China’s curbs on exports of rare earth minerals, crucial for autos and more, have drawn Washington’s ire.
Read more: What Trump’s tariffs mean for the economy and your wallet
The US-China talks come as Trump pushes countries to speed up negotiations. The US sent a letter to partners as a “friendly reminder” that Trump’s self-imposed 90-day pause on sweeping “reciprocal” tariffs is set to expire in early July.
White House advisers have for weeks promised trade deals in the “not-too-distant future,” with the only announced agreement so far coming with the United Kingdom. US and Indian officials held trade talks this week and agreed to extend those discussions on Monday and Tuesday ahead of the July 9 deadline.
New tariffs are coming into play: Effective Wednesday, June 4, Trump doubled tariffs on steel and aluminum from 25% to 50%.
Meanwhile, Trump’s most sweeping tariffs face legal uncertainty after a federal appeals court allowed the tariffs to temporarily stay in effect, a day after the US Court of International Trade blocked their implementation, deeming the method used to enact them “unlawful.”
Here are the latest updates as the policy reverberates around the world.
LIVE1132 updates
Citi expects banking fees, trading revenue to climb despite US tariff “anxiety”
Banking fees and trading revenue for one of the world’s largest investment banks is expected to climb this quarter despite the concerns that surround US tariffs, Citigroup’s (C) head of banking Vis Raghavan said on Tuesday. Raghaven added, that M&A activity continues to be active but the IPO market has been “stagnant.”
Reuters reports:
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World Bank slashes global growth forecast as trade tensions bite
The World Bank cut its global growth forecast for 2025 on Tuesday by 0.4 percentage point to 2.3%. The international financial institution, which provides loans to governments said that high tariffs and uncertainty were a “significant headwind” for nearly all economies.
Reuters reports:
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Trump asks appeals court to keep tariffs in place or risk ‘irreparable economic and national security harms’
Yahoo Finance’s Alexis Keenan reports:
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Lutnick: US-China trade talks going well on second day
On Tuesday, US Commerce Secretary Howard Lutnick said trade negotiations with China were going well, as the two sides met in London for a second day of talks.
Reuters reports:
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Freeport CEO: Tariffs threaten to hinder US copper mining
The CEO of Freeport-McMoRan Inc. (FCX), North America’s top producer of copper has warned that tariffs could hurt an industry that President Trump is trying to help.
Bloomberg News reports:
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Exclusive: India’s Maruti Suzuki cuts near-term EV production amid rare earths crisis
Reuters reports:
Maruti Suzuki has cut near-term production targets for its maiden electric vehicle e-Vitara by two-thirds because of rare earths shortages, a document showed, in the latest sign of disruption to the auto industry from China’s export curbs.
India’s top carmaker, which said on Monday it had not seen any impact yet from the supply crisis, now plans to make about 8,200 e-Vitaras between April and September, versus an original goal of 26,500, according to a company document seen by Reuters.
It cited “supply constraints” in rare earth materials that are vital in making magnets and other components across a range of hi-tech industries.
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From visas to jets, US and China are finding new trade leverage
Both the US and China are finding new tools to use as bargaining chips within trade negotiations. Here’s an example of just some of them:
Bloomberg News reports:
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US small biz sentiment up in May, but uncertainty rising
The de-escalation in trade tensions likely contributed to an improvement in US small-business confidence in May. However, uncertainty remained due to the overall economic outlook.
Reuters reports:
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Chinese stocks fall amid trade talk rumors
Chinese stocks fell on Tuesday ahead of the second day of trade negotiations between the US and China. Investors are cautious as the two biggest economies seek to resolve some contentious issues.
Bloomberg News reports:
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China has a valuable card to play as it holds trade talks with the US
As US-China trade negotiations resume in London on Tuesday, both sides are eager to rebuild the truce established in May. While, the US has tightened controls on AI chip exports, China may be holding the most valuable card in these talks.
CNN reports:
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WPP cuts 2025 global ad revenue growth forecast to 6% on trade fears
Advertising firm, WPP said on Tuesday that global advertising revenue is expected to grow 6% this year, lowering its earlier target of 7.7% due to the uncertainty surrounding US trade policies.
Reuters reports:
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Trump says China ‘not easy’ as trade talks to continue Tuesday
Bloomberg reported that trade talks between the US and China will resume tomorrow morning at 10 a.m. in London after six hours of negotiations on Monday.
US officials were looking for a “handshake” on Monday, National Economic Council director Kevin Hassett told CNBC, as the two sides look to ease tensions over tech and rare earths.
President Trump weighed in on the progress, telling reporters on Monday: “We are doing well with China. China’s not easy. … I’m only getting good reports.”
Treasury Secretary Scott Bessent, meanwhile, said it was “good meeting” and Commerce Secretary Howard Lutnick called the talks “fruitful,” sending an upbeat signal on the talks’ progress.
The Chinese delegation, led by Vice Premier He Lifeng, did not comment on the talks.
From Bloomberg:
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US ocean container imports tumble in May as China tariffs take hold
The number of ocean containers from China bound for the US fell precipitously in May when President Trump’s 145% tariffs on Chinese goods were in effect.
Supply chain technology company Descartes said Monday that seaborne imports from China to the US dropped 28.5% year over year, the sharpest decline since the pandemic, per Reuters.
Overall, US seaborne imports fell 7.2% annually in May to 2.18 million 20-foot equivalent units. The decline snaps a streak of increases fueled by companies frontloading goods to avoid higher duties, which has kept US seaports, such as the Port of Long Beach, busy.
“The effects of U.S. policy shifts with China are now clearly visible in monthly trade flows,” Descartes said in a statement.
Read more here.
Market volatility subsides as trade uncertainty declines
In today’s Chart of the Day, Yahoo Finance’s Josh Schafer writes that tariff headlines have been rattling markets to a lesser degree than they did in April, despite an escalation of trade tensions recently:
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Trump’s steel and aluminium tariffs expected to push up US import costs by $100 billion
US import costs of steel and aluminum are expected to rise by more than $100 billion after President Trump doubled tariffs on the metals to 50% this week.
That is expected to impact automakers such as Ford (F), as well as importers for a variety of goods, from baseball bats to aircraft parts.
The Financial Times reports:
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Aluminium producers in the US win from Trump’s tariffs
Tariffs have brought challenges for many, but Century Aluminum (CENX) and top recycler Matalco stand to benefit from President Trump’s metal import duties as domestic prices rise.
Reuters reports:
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US seeking ‘handshake’ on rare earths from China, White House aide says
The US is keen to strike a firm deal with China on rare earths exports as both sides resume talks in London today.
Reuters reports:
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Auto companies ‘in full panic’ over rare-earths bottleneck
Global auto companies are hoping that trade talks between the US and China on Monday could help fast track rare earth exports from China, which are desperately needed.
Reuters reports:
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China’s rare earth exports jump 23% in May despite export curbs
Outbound shipments of rare earths in May from China rose 23% on the month to their highest in a year, despite Beijing’s export curbs on some of the critical minerals prevented some overseas sales, with shortages impacting global manufacturing.
Bloomberg News reports:
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China exports to US fall most since 2020 despite trade truce
Chinese exports rose less than expected last month, held back by the biggest drop in shipments to the US in over five years, despite strong demand from other markets.
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