Following talks on the crisis between the president of USA Donald Trump and its president ChinaSi Jinping last Wednesday, both sides are now negotiating in London for possible compromises in the trade dispute. The conflict between the world’s two largest economies has been scaled again in recent weeks.
In contrast to previous commercial conversations, these They are not mainly for duties, but rather the export controls of rare earths from Chinawho seriously harm the US economy.
However, pressure on China’s economy is also increasing. In spite of the cessation of duties agreed in May, Exports from China to US declined by more than 34% Compared to the same month last year, according to data from the Chinese Customs Administration. Exports are a key pillar of the weakened Chinese economy.
Commercial dispute escalates again
In early May, China and the US agreed to cease the trade dispute in Geneva. However, they recently accused each other of breaking the agreements reached there.
It is not yet known how much talks in London will last or when results are expected. According to the Chinese Foreign Ministry, China’s leader, Vice President of the HE Lifeng government, will be in London from June 8 to June 13th. The US delegation will be led by Finance Minister Scott Bessed, Commerce Minister Howard Latnik and trade spokesman Jameson Green. Luitnik, who was not present in Geneva, is considered a supporter of China.
Negotiations in Geneva lasted two days. The result was announced on the morning of the third day. At that time, the two parties agreed, to surprise, to suspend the reciprocal duties previously imposed for 90 days. China also pledged to take “the necessary measures to suspend or remove non -duty counterparts against the United States since April 2, 2025”.
The fact that the government has, however, complied with the restrictions on exports of rare land has caused dissatisfaction in the United States. In return, at the end of May, the United States limited the exports of chip software, aircraft, chemical semiconductor and ethanide gases to China. They also warned commercial partners of the consequences if they used chips from the Chinese IT equipment manufacturer Huawei.
These are the largest points of controversy in the conflict between China and the US:
1. Restrictions on the exports of rare earths from China
The focus of negotiations between China and the US in London is the restrictions on the exports of rare land to China. In response to US duties, Beijing introduced in early April requirement of licensing to export seven so -called rare earths, as well as magnets of rare land. China has essentially a monopoly on many of these strategically important raw materials.
As a result, exports have almost stopped completely. Many companies, especially in the automotive industry, are therefore facing production congestion. Some have already encountered a break, as Handelsblatt said last week.
Trump then accused China of “blatantly violating” the Geneva agreements. The Chinese side, in turn, argues that export controls are not officially a countermeasure to US duties. On the contrary, they serve to protect national security and apply to all countries.
The power of this leverage is evidenced by the fact that Trump pressed for a conversation with Si to negotiate a solution. Following the phone call on Wednesday, Trump announced to his online Truth Social platform that “there should be no other questions about the complexity of rare land”. However, the complicated wording asked questions about exactly what the two leaders discussed, especially because the Chinese side statement did not mention the rare land.
On Friday, June 6, 2025, Trump answered a journalist’s question about whether Si had promised to supply rare land and magnets in the United States: “Yes, he has done it.” According to a report by the Reuters news agency, suppliers of the three US automakers, Ford and Stellantis – have now received temporary export licenses.
The EU Chamber of Commerce in China also reported a “slight improvement” in the situation for European suppliers on Friday. Obviously, China offers Europeans a “green channel” for the fastest version of export licenses. In return for loosening export controls, however, the Chinese leadership is likely to require loosening of West technology export restrictions.
2. US Technological Restrictions to slow China’s technological rise
The US is trying to slow China’s rapid technological race to cover it, imposing more and more extensive exporting. In particular, the US export embargo imposed in October 2022 on the supply of high -tech chip and modern machinery for their production is hitting China.
Since then, measures have expanded more and more. At the end of May, for example, the US limited the sale of semiconductor software in China. While previous US technological restrictions were mainly aimed at high -tech chips, restrictions are now affecting the entire Chinese semiconductor industry.
At the end of May it was also announced that the US prohibited from exporting engines of aircraft, chemicals for semiconductors and gases butter and ethane. The US government also threatened to remove visas from Chinese students. After talks with Si, however, Trump assured that students from the People’s Republic would continue to be welcomed in the US.
Chinese companies exported $ 525 billion in the US last year, according to data from the Chinese Customs Authority. Imports, on the other hand, amounted to only $ 164 billion. The US has long criticized this imbalance.
For China, the US, with its 340 million consumers, are its most important single market. However, despite the cessation of duties agreed in May, Chinese exports to the US have recently collapsed. The reason for this sharp decline is probably not just the uncertainty of many American customers.
High duties still apply to many Chinese imports. The cessation of the duties agreed in Geneva only applies to the burdens imposed by Trump after the so -called “day of liberation” on April 2. The duties imposed by the previous government under Joe Biden, for example, remain in force, including a 100% charge on electric cars from China.
On average, Chinese exports to the US are still subject to duties of about 40%, experts estimate. Since the average profit margin for many mass export products, such as games, is about 30%, exports to the US are no longer profitable for many companies without price increases.
3. Exporting precursors for drug fentanyl from China
During the Geneva negotiations, China and the US have agreed to temporarily suspend many of the previously imposed mutual punitive duties. However, this was not the case for 20%punitive tariffs, which Trump justified from the fact that Chinese companies were exporting precursors to the fatal drug fentanyl in the US. About 450,000 people in the US have already died of overdose of extremely addictive, cheap drug. It is not yet known whether this issue will also be discussed in London.
Unlike the government of Trump’s predecessor, Joe Biden, China’s exports to its partner, Russia, including military potential products, no longer seem to be a central point of controversy. During the visit of Chancellor Friedrich Mertz (CDU) to Washington last week, Trump compared Russia and Ukraine with young children: “Sometimes it is better to let them quarrel for a while and then dissolve them.”