The U.S.-China Trade War after Trump’s First Term: Prime Minister Xi, Trade Minister Wang, and the United Kingdom

The American negotiation team has also continued to push China to purchase more American goods and reduce a U.S. trade deficit with China, a key demand in a so-called Phase One trade deal struck during Trump’s first term and which China never fully implemented.

U.S. and Chinese officials struck a temporary truce in a meeting in Geneva last month to roll back tariffs and, Trump administration officials believed, to restart a steady flow of rare earths to American companies. The shipments of minerals and magnets remain tightly controlled. In late May, Ford temporarily closed a factory in Chicago that makes its Explorer sport utility vehicle because of a lack of magnets.

There have also been tensions after the U.S. announced stringent new export controls on high-end semiconductor chip technology, including chip design software, on China — and said it also plans to revoke some visas held by Chinese students.

On the call, Mr. Xi warned that the leaders of the United States and China needed to “steer clear of various disturbances or even sabotage,” seemingly a reference to the idea that critics of China in Mr. Trump’s government had driven some of these efforts without his knowledge. One person who is familiar with the effort said that it was done with Mr. Trump’s knowledge.

Talks continued into a second day Tuesday, with three of Trump’s top aides attending. The Chinese vice premier and lead economic representative are in London, with the commerce secretary, trade secretary and trade representative.

The U.K. government says it’s providing the venue and logistics for the U.S.-China talks but is not involved in them. “We are a nation that champions free trade and have always been clear that a trade war is in nobody’s interests, so we welcome these talks,” it said in a statement.

China’s commerce minister spoke with Britain’s business secretary during a meeting in London. A statement from China’s commerce ministry said Wang called for both countries to uphold the multilateral trading system, and he wanted to see greater cooperation between China and Britain on finance and sustainability.

Overall, U.S. tariffs on goods from China still remain higher than those imposed on other countries. The U.S. slashed its base tariffs on goods from China to 30%.

But while China has said it would be willing to set up an expedited “green channel” for companies needing rare earths, it has also signaled it will not completely ease its powerful grip on the world’s supply of refined rare earth products, saying its export controls are “driven by its domestic industrial sustainable development needs,” according to a commentary published this week by the country’s state news agency.

We’re Doing Well with China, and What Will We Learn in the New York-London Trade Dialogue? Yu Jie at the Chatham House think-tank

Relations between the two countries have deteriorated since their tentative truce in Geneva, with each accusing the other of violating the agreement struck there.

Yu Jie, senior research fellow on China at London’s Chatham House international affairs think-tank, warns that we “should not hold our breath for any major progress” following the talks, with both sides unlikely to offer any further tariff reductions. We’re now in the middle of trade negotiations between Beijing and Washington. China is aware of the importance of holding this card of the rare earth export controls. On the other hand, the U.S. really wants to slow down China’s technology progress.”

We will have to talk about some thornier sticking points over the next few days, according to Yu. He thinks the talks will go on all day. He told reporters the talks were “going well” and “we’re spending lots of time together.” Talks could continue beyond Tuesday, as the Chinese delegation is in London all week.

President Trump told reporters at the White House on Monday that he was receiving good reports from the talks. “We’re doing well with China. Trump said that China is not easy.

Lancaster House is a grand government mansion in the U.K. capital that is currently being used as a site for trade negotiations between the U.S. and China. There are investors and world leaders interested in the talks to see if they can stop the trade war between the world’s two biggest economies.