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US and Chinese officials will meet in London to discuss important trade issues

The top U.S. officials and Chinese officials are due to meet on Monday in London for talks to defuse the high-stakes dispute over trade that has grown in recent weeks to include more than just tit-fortat tariffs, but also export controls of goods vital to global supply chains.

The two superpowers would meet in the elegant Lancaster House, to try and get back on track after a preliminary deal struck last month at Geneva had temporarily cooled the tensions between Washington and Beijing.

The talks were scheduled to begin around 1130 GMT Monday. Both economies are in a critical period, as investors seek relief from the flurry of tariff orders issued by U.S. president Donald Trump since his return to White House.

A UK government spokesperson announced on Sunday that the next round of U.S.-China trade talks will take place in the UK on January 1. "We are a country that has always championed free trade, and we have been clear that a war in trade is not in anyone's interest. So, we welcome these discussions."

A U.S. delegation led by Treasury Sec. Scott Bessent will gather with Commerce Sec. Howard Lutnick, U.S. trade representative Jamieson Greer and a Chinese delegation headed by Vice Premier He Lifeng.

In Geneva, the two sides agreed on reducing steep import taxes that each side had imposed on the other's products. This had resulted in a trade ban between the No. In recent weeks, U.S. officials have accused China of not keeping its promises, especially in relation to rare earths shipments.

Lutnick's inclusion, whose agency is responsible for export controls in the U.S.A., shows how important rare earths have become. He didn't attend the Geneva talks where the countries reached a 90-day agreement to reduce some of the triple digit tariffs that they placed on eachother.

CONCLUSION POSITIVE

The second round of talks comes just four days after Trump spoke with Chinese leader Xi Jinping by phone. It was their first direct contact since Trump's inauguration on January 20, 2017.

During the call that lasted more than an hour, Xi warned Trump against threatening actions on Taiwan and urged him to drop trade measures which were causing global economic turmoil.

Trump posted on Twitter that the trade-focused talks had "a very successful conclusion," which set the stage for the meeting on Monday in London.

Next day, Trump announced that Xi agreed to resume shipments of rare earth minerals and magnets to the U.S. China's April decision to halt exports of magnets and minerals was a major blow to the supply chains of automakers, aerospace companies, semiconductor firms and military contractors.

Karoline leavitt, White House spokesperson, told Fox News' "Sunday Morning Futures," on Sunday: "We want China to and the United States continue moving forward" with the Geneva agreement. The administration has been closely monitoring China's compliance to the agreement, and we are hopeful that this will lead to more comprehensive trade negotiations.

The preliminary agreement in Geneva has sparked an international relief rally on stock markets. U.S. indices, which were in or near bear-market levels, have recovered the majority of their losses.

S&P 500 Index is only 2% off its mid-February record high. At its lowest point, the index was down 18% in early April after Trump announced his "Liberation Day", sweeping tariffs on all goods around the world. The last third of the rally was triggered by the U.S./China truce in Geneva.

This temporary agreement did not address the broader issues that are straining the bilateral relationship. These include the illicit fentanyl traffic, the democratically-governed Taiwan, and U.S. complaints against China's export-driven, state-dominated economic model.

The UK government will host the discussions on Monday, but it will not participate in them. Instead, the Chinese delegation will hold separate talks with the UK later this week.

As investors awaited news, the dollar fell against all major currencies. Oil prices were also little changed. Reporting by Trevor Hunnicutt, Nathan Layne, Brenda Goh, and Kate Holton, in Washington; Writing and editing by Dan Burns, Chris Reese, and Toby Chopra.

(source: Reuters)