Background & Recent Developments
- 90‑day Geneva Truce
On May 12, 2025, in Geneva, both nations agreed to a 90-day tariff truce: the U.S. reduced tariffs on Chinese goods from 145% to 30%, while China cut tariffs on U.S. imports from 125% to 10% .
- Leadership Dialogue
A pivotal June 5 90‑minute phone call between Presidents Trump and Xi focused almost exclusively on trade and rare earths issues; Trump described it as very positive and agreed on mutual invitations for upcoming state visits.
Current Update: London Meeting (June 9, 2025)
The first round after Geneva resumed on June 9 in London, hosted by the UK. U.S. leaders Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer met with China’s Vice Premier He Lifeng.
Agenda items include:
- Restoring compliance under the Geneva truce
- Rare earth minerals and export controls (notably critical for tech industries)
- High‑tech trade, semiconductors, and immigration policy concerns
- “Illicit fentanyl trade” and broader economic issues such as China’s state‑directed model
Predicted Outcomes
1. Short‑Term & Superficial Gains
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Likely to produce short‑term, low‑hanging fruits like limited commitments (e.g. more Chinese purchases of U.S. goods or cooperation on fentanyl control).
Rare earths export commitments might see some easing; China hinted at resuming shipments after Trump’s call.
2. Stock & Commodity Market Boosts
Equity markets have already rallied in anticipation the S&P 500 and Dow saw slight gains ahead of the London meeting.
Oill and gold prices responded modestly as traders weighed the impact on global demand.
3. No Structural Reform Likely
Analysts highlight that China’s dual-circulation economic model and U.S. “small yard, high fence” tech security approach mean deep structural changes are improbable . It’s a truce—not a treaty.
4. Potential Extensions of Truce
If London meetings go smoothly, expect extension of the Geneva frameworks—possibly more tariff rolls or export-control dialogues—but still within set boundaries.
5. Lingering Tensions
Key thorny issues—semiconductor access, technology transfer restrictions, and Chinese visa policies—are likely to remain unresolved.
Broader geopolitical flashpoints (Taiwan, national security) will continue to color negotiations.
