First Meeting of China-U.S. Economic and Trade Consultation Mechanism – What’s on the Agenda Beyond Tariffs?

TradingKey - Following a phone call between Chinese President Xi Jinping and U.S. President Donald Trump — their first in nearly six months — China and the U.S. are set to hold the inaugural meeting of their economic and trade consultation mechanism in the UK. While tariff reductions remain a key topic, both sides are bringing other strategic bargaining chips to the table: China’s rare earth exports and the U.S. export of high-tech products.

On June 7, China's Foreign Ministry announced that Vice Premier He Lifeng will pay an official visit to the UK from June 8 to 13. During the trip, he will co-host with U.S. representatives the first meeting of the China-U.S. Economic and Trade Consultation Mechanism. The U.S. delegation will be led by Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer.

Experts noted that this consultation was directly prompted by the recent leaders’ call, giving future China-U.S. trade talks greater stability and institutional structure. It is expected to help clarify the differences in understanding that emerged after the high-level Geneva trade talks.

After the China-U.S. Geneva trade agreement reached in early May, U.S. stock markets saw a strong rebound. However, during the following weeks, both sides accused each other of failing to honor commitments and implementing targeted restrictions, leading to no further progress in negotiations.

Economists have pointed out that there has been confusion, misunderstanding, and misinterpretation regarding the details of the agreement, leaving many issues open to interpretation. Both parties have since paid a price for these ambiguities.

During this period, China suspended exports of several critical minerals and magnets essential for automotive manufacturing, aerospace, semiconductors, and military supply chains. In response, the U.S. imposed tighter export controls on semiconductor chips and design software technologies.

Following the leaders’ call, Trump stated that China had allowed some applications for rare earth and magnet exports to proceed.

According to Reuters, rare earths and other critical minerals remain a strategic leverage for China. If global companies are unable to access these materials needed for clean energy and advanced technology production, Trump may face domestic political pressure.

For the U.S., White House economic advisor Kevin Hassett expressed hopes that rare earths and magnets — vital components for smartphones and countless other products — would return to normal operations, as they were before early April.

From China’s perspective, the Ministry of Commerce accused the U.S. of restricting technology exports and depriving other countries of the right to develop high-tech industries such as computing chips and artificial intelligence. China urged the U.S. to lift these restrictive measures.

According to CNN, U.S. export controls on high-tech products to China could become a major focus of discussion during the upcoming consultations.