US wants ‘handshake’ on rare earth curbs as talks begin in London

Top US and Chinese officials were meeting in London on Monday to try to defuse a high-stakes trade dispute that has widened beyond tit-for-tat tariffs to restrictions over rare earths, threatening to cripple supply chains and slow global growth.

Officials from the two superpowers were meeting at the ornate Lancaster House to try to get back on track with a preliminary agreement struck last month in Geneva that had briefly lowered the temperature between Washington and Beijing.

Since then the US has accused China of slow-walking on its commitments, particularly around rare earths shipments. US economic adviser Kevin Hassett said on Monday that the US team wanted a handshake from China on rare earths after Trump and Xi spoke last week.

He said the expectation was that immediately after the handshake, export controls would be eased and rare earths released in volume.

The talks, which could run into Tuesday, come at a crucial time for both economies, with investors looking for relief from Trump’s cascade of tariff orders since his return to the White House in January.

China’s export growth slowed to a three-month low in May while its factory-gate deflation deepened to its worst level in two years.

In the US, the trade war has put a huge dent in business and household confidence, and Q1 GDP contracted due to a surge in imports.