The second round of trade negotiations between the United States and China commenced on Monday in London, as the two economic giants seek to extend a fragile truce following months of escalating tariffs and trade tensions.

This meeting follows a previous session held in Geneva in May, where discussions focused primarily on tariff reductions.

In London, the agenda pivots towards finding solutions to the fierce competition in critical minerals and advanced technologies that have strained both economies.

U.S. officials indicated that the Trump administration intends to ease restrictions on technology exports to China, while expecting a reciprocal increase in Chinese exports of rare earth minerals to U.S. markets.

These materials are vital for various industries, including electronics and defense.

A significant follow-up discussion occurred last Friday during a phone call between U.S. President Donald Trump and Chinese President Xi Jinping, where both leaders compared their nations to ships navigating through turbulent seas, highlighting the necessity for cooperative steering to avoid further derailment of economic relations.

The 90-minute conversation, which marked a pivotal moment in the negotiations, reversed the course of a potentially complete collapse of their agreed truce, with Trump confirming that negotiators from both sides would meet face-to-face.

Representing the United States are Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer, joined by Commerce Secretary Howard Lutnick.

On the Chinese side, Vice Premier He Lifeng, Beijing's leading economic official, heads the delegation.

In May, after two days of exhaustive negotiations, the two nations agreed to a temporary 90-day ceasefire, during which most tariffs were suspended.

The punitive tariffs that the U.S. had increased to 145% on Chinese goods were reduced to 30%, while the 125% tariffs imposed by China were lowered to 10%.

However, a separate 20% tariff related to fentanyl production, which has severely impacted the U.S., remains unchanged.

Tensions had escalated recently, with both sides accusing each other of violating the ceasefire terms established in Geneva.

China had implemented new restrictions on the export of critical minerals, while the U.S. suspended certain technology sales to China, including components used for jet engines and semiconductors.

After the call between Trump and Xi, both governments reiterated the importance of de-escalating tensions, although interpretations of the conversation varied significantly.

Trump suggested that the dispute over critical minerals had been resolved, a claim that went unacknowledged in China's subsequent statements.

Conversely, China emphasized its success in persuading the U.S. to relax its visa restrictions on Chinese students, which had been a significant area of contention.

In a gesture of goodwill ahead of the London talks, China announced a temporary lifting of some restrictions on its minerals, granting temporary export licenses to the three major U.S. automobile manufacturers.

China dominates global supply chains for many critical minerals and holds a near-monopoly on rare earth elements, essential for both civilian and military technology.

Coinciding with this round of negotiations, Chinese customs authorities reported an 8.1% decline in bilateral trade with the U.S. from January to May, highlighting the profound impact of the ongoing trade war between the two superpowers.

In May alone, trade denominated in yuan saw a drastic 30% drop year-on-year, as imports from the U.S. decreased by 16.9% and exports to the U.S. fell by 33.57%.

The economic repercussions extend across both nations, with U.S. companies in China indicating no intent to relocate their manufacturing back to the U.S. Instead, some firms are contemplating shifting operations to neighboring countries, thereby attempting to circumvent the tariffs while maintaining supply chains in Asia.

The complexities of the ongoing trade negotiations are underscored by fluctuating international dynamics, with various Asian nations evaluating their own positions in the evolving landscape of U.S.-China relations.

Despite differing interpretations of their economic statuses, the impact of tariffs and trade disputes continues to resonate across global markets, signaling ongoing challenges in achieving a stable and cooperative trading environment between the two largest economies.