National Economic Council Director Kevin Hassett expressed optimism about a potential trade deal between the United States and China, stating he is “very comfortable” with a deal closing after the two sides meet in London on Monday. This comes after President Donald Trump said he had a “very good” conversation with Chinese leader Xi Jinping, and talks with China are “very far advanced”.
The US is seeking to restore the flow of “crucial” rare earth minerals, used in electronics manufacturing, to pre-April levels when the trade war escalated. Hassett noted that exports of these minerals have increased but not to the agreed-upon levels in Geneva. Commerce Secretary Howard Lutnick will lead the negotiations in London, accompanied by Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer.
Tensions between the nations escalated after Trump posted that China “totally violated” its 90-day trade agreement. Under the agreement, the US temporarily lowered tariffs on Chinese goods from 145% to 30%, while China cut levies on American imports from 125% to 10%. China also agreed to suspend or cancel non-tariff countermeasures imposed on the US since April 2, including export restrictions on rare earth minerals.
Hassett defended the Trump administration’s tariff policy, saying, “You could be certain that there’s going to be some tariffs.” Lutnick previously stated that the baseline tariff rate would not go below 10%. The administration has touted that other countries, particularly China, will bear the burden of tariffs, but businesses and economists have warned of uncertainty and potential recession.
The trade talks come amid slowing US inflation, with the annual rate falling to 2.3% in April. Hassett attributed this to the administration’s policies, saying, “All of our policies together are reducing inflation and helping reduce the deficit by getting revenue from other countries.” The Treasury Department reported a record $16.3 billion in gross customs duties in April, a significant increase from March.