As the U.S. and China prepare for trade negotiations in London this week, new disagreements have surfaced, threatening to destabilize a fragile truce on tariffs reached just weeks ago.

In May, the two countries agreed in Geneva to a 90-day pause on most of the high tariffs—over 100%—they had imposed during their ongoing trade war, which had stoked fears of a global economic slowdown.

Since the truce, tensions have re-emerged over key issues including semiconductor technology, the export of rare earth minerals, and U.S. visa policies for Chinese students.

President Donald Trump and Chinese President Xi Jinping spoke by phone last Thursday in an attempt to smooth over the tensions. The following day, Trump confirmed on social media that trade talks would resume Monday in London.

Technology Disputes Reignite Tensions

Just a day after the Geneva deal was announced on May 12, new friction arose. The U.S. Commerce Department issued guidance warning that AI chips from Huawei, a major Chinese tech company, could breach U.S. export restrictions—alleging the chips were likely developed using American technology despite export bans.

Beijing reacted strongly, accusing the U.S. of unfairly restricting access to vital semiconductor technologies.

“The Chinese side urges the U.S. to correct its wrongful practices immediately,” a spokesperson from China’s Commerce Ministry said.

While U.S. Commerce Secretary Howard Lutnick did not attend the Geneva talks, he is set to participate in the London discussions, signaling a potential openness to hearing China’s complaints about export regulations.

China Loosens Grip on Rare Earth Exports

China retains a significant advantage in rare earth production—materials critical for manufacturing everything from cars to military equipment. In April, China began requiring special export licenses for seven types of rare earths, sparking concern among global automakers over potential shortages.

Trump criticized China online on May 30, accusing it of breaking the Geneva agreement—though he did not reference rare earths directly.

In response to international pressure, including from European businesses, China signaled over the weekend that it was easing some restrictions. A Commerce Ministry statement said it had approved several export applications and would continue processing compliant requests.

This move highlights China's leverage in trade disputes, particularly when it comes to strategic resources.

Student Visa Policy Fuels Further Strain

Although not a typical subject of trade talks, the U.S. plan to cancel some Chinese student visas has become another flashpoint.

China's Commerce Ministry responded to criticism over its compliance with the Geneva agreement by pointing to U.S. actions—including the AI chip export guidance, a halt on selling chip-design software to China, and the visa revocation policy—as evidence of the U.S. undermining the deal.

“The United States has unilaterally created new trade and economic frictions,” the ministry said in a statement.

U.S. Secretary of State Marco Rubio confirmed on May 28 that the U.S. would begin aggressively revoking visas for Chinese students, particularly those with ties to the Chinese Communist Party or studying in sensitive fields.

During the 2023–24 academic year, more than 270,000 Chinese students were enrolled in U.S. institutions.