US-China Trade Talks “Going Well” On Second Day, Lutnick Says

US-China trade talks are again in the spotlight, with a second day of negotiations taking place in London aimed at beefing up the fraying truce between the world’s two biggest economies. 

As he arrived, Commerce Secretary Howard Lutnick said the talks were “going well” and he expected another full day of discussions. Meanwhile, markets remain on edge as the world’s largest economies try to agree to allow exports of key tech and industrial goods and avoid escalating their trade war. The Bloomberg Dollar Spot Index, which has fallen sharply this year as trade tensions undermine confidence in US assets, is around its lowest levels since 2023.

As delegations from the US and China begin a second day of trade talks, US Commerce Secretary Howard Lutnick said things are “going well” and expects discussions to go “all day today” https://t.co/ySdcfiszQI pic.twitter.com/tuU6HFiFWI

— Bloomberg TV (@BloombergTV) June 10, 2025

The teams led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng reconvened Tuesday just after 10:40 am at Lancaster House. The Georgian-era mansion near Buckingham Palace has hosted major addresses by UK prime ministers, speeches by central bank governors and parties for Britain’s royal family.

Export controls are at the top of the agenda. Kevin Hassett, director of the National Economic Council, said Monday that the talks were likely to result in Beijing quickly releasing rare earths for export, and Washington easing China’s access to semiconductors. A subsequent rally in chip stocks helped lift major indexes.

According to Bloomberg, the key issue this week is re-establishing terms of an agreement reached in Geneva last month, in which the US understood that China would allow more rare earth shipments to reach American customers. The Trump administration accused Beijing of moving too slowly, which threatened shortages in domestic manufacturing sectors.

In return, the Trump administration is prepared to remove a recent spate of measures targeting chip design software, jet engine parts, chemicals and nuclear materials, people familiar with the matter said. Many of those actions were taken in the past few weeks as tensions flared between the US and China (however, as discussed here, “China’s Need For US Chemicals Greater Than US Need For Rare Earths“).

A month ago Beijing and Washington agreed to a 90-day truce through mid-August in their crippling tariffs to allow time to resolve many of their trade disagreements — from tariffs to export controls.

At the same time, Trump’s trade team is scrambling to secure bilateral deals with India, Japan, South Korea and several other countries that are racing to do so before July 9, when the US president’s so-called reciprocal tariffs rise from the current 10% baseline to much higher levels customized for each trading partner.

Separately, Chinese President Xi Jinping on Tuesday held his first phone conversation with South Korea’s newly elected President Lee Jae-myung and called for cooperation to safeguard multilateralism and free trade.

“We should strengthen bilateral cooperation and multilateral coordination, jointly safeguard multilateralism and free trade, and ensure the stability and smoothness of global and regional industrial chains and supply chains,” Xi said, according to the CCTV report.