Cantor Fitzgerald CEO Lutnick: You can say China tariff levels won't change from here

Cantor Fitzgerald CEO Lutnick: You can say China tariff levels won't change from here

US-China trade talks are ongoing, with the second day of negotiations taking place today in London. The first day of discussions, held yesterday, concluded after more than six hours of talks at Lancaster House, a 19th-century mansion near Buckingham Palace. The talks are aimed at easing tensions over shipments of technology and rare earth elements [1].

The US delegation was led by Treasury Secretary Scott Bessent, accompanied by Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer. Lutnick, a former Cantor Fitzgerald CEO, underscored the importance of export controls in these discussions. Bessent described the meeting as "good," while Lutnick called it "fruitful" [1].

The Chinese delegation was led by Vice-Premier He Lifeng, who left without commenting to the media. With him were Commerce Minister Wang Wentao and his deputy Li Chenggang, the country's trade representative. Wang and Li are significant figures in Chinese trade policy, with Wang becoming a fixture in President Xi Jinping's entourage on overseas trips since his appointment in 2020 [1].

The US signaled a willingness to remove restrictions on some tech exports in exchange for assurances that China is easing limits on rare earth shipments. These elements are critical to a wide array of energy, defense, and technology products, including smartphones, fighter jets, and nuclear reactor rods. China accounts for almost 70% of the world's production of rare earths [1].

The Trump administration is prepared to remove measures targeting chip design software, jet engine parts, chemicals, and nuclear materials. However, Trump was noncommittal about lifting export curbs, stating, "we'll see" when asked about the possibility of such a move. He added that "China has been ripping off the United States for many years," but emphasized that "we want to open up China" [1].

Kevin Hassett, head of the White House's National Economic Council, indicated that the US expects to ease export controls and increase rare earth shipments after the London talks. However, he added that restrictions would not be lifted on the most sophisticated chips made by Nvidia Corp used to power artificial intelligence [1].

Lutnick, commenting on the possibility of tariff changes, stated, "You can say China tariff levels won't change from here." His statement reflects a cautious approach to the negotiations, with both sides aiming to restore confidence in their commitments made in Geneva [1].

Investors are hopeful that the talks will signal a cooling of trade tensions. Stocks in Hong Kong and the US have shown positive movements, with the S&P 500 within 2% of its February peak. Today's talks are expected to continue, with the focus on resolving outstanding issues and restoring trade confidence [1].

References:
[1] https://www.businesstimes.com.sg/international/global/trump-says-china-not-easy-trade-talks-resume-tuesday
[2] https://theedgemalaysia.com/node/758427
[3] https://www.firstonline.info/en/stocks-confident-in-us-china-talks-that-continue-today-trump-china-is-not-easy-eyes-on-treasuries-auctions/amp/