Background of the Trade Conflict
The trade conflict between the USA and China has extended over several years and has been exacerbated by tariffs and counter-tariffs. The USA has increased punitive tariffs on imports from China, to which China has responded with its own measures. A central issue is the control over rare earths, which are crucial for the production of technology products like mobile phones.
Current Talks in London
The talks in London, which take place from June 8 to 13, are being led by high-level representatives from both sides. The Chinese delegation is headed by Vice Premier He Lifeng, while the US delegation is led by Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, among others. These meetings aim to help implement the agreement reached in May in Geneva, which provides for a temporary reduction in tariffs.
Impact on the Markets
The hope for a resolution to the trade conflict has positive effects on the markets. Investors are reacting optimistically to the prospect of reduced tensions between the USA and China. This could lead to a stabilization of global trade flows and reduce uncertainty for businesses and investors.
Challenges and Disputes
Despite the optimism, significant challenges remain. Points of contention include US restrictions on the sale of technology products to China as well as China’s export controls on rare earths. China has recently approved some export applications for rare earths but has provided no details regarding the countries or industries affected.
Overall, the trade talks between the USA and China demonstrate that both sides are willing to continue the dialogue and seek solutions to the ongoing conflict. The positive market reactions suggest that a resolution of the conflict could offer significant economic benefits.