China and U.S. trade officials hold talks in London

U.S. President Donald Trump’s top trade officials are meeting their Chinese counterparts in London on Monday for talks aimed at resolving an ongoing trade dispute between the world’s two largest economies.

U.S. Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer are representing the U.S.

China’s Foreign Ministry said Saturday that Vice Premier He Lifeng, Beijing’s lead trade negotiator, will be in the U.K. between June 8-13, and that a meeting of the “China-U.S. economic and trade consultation mechanism” would take place.

National Economic Council Director Kevin Hassett on Monday told CNBC’s “Squawk Box” that the U.S. was seeking confirmation China would restore the flows of critical minerals.

“The purpose of the meeting today is to make sure that they’re serious, but to literally get handshakes … and get this thing behind us,” Hassett said.

He added that he expected it “to be a short meeting with a big, strong handshake.”

“Our expectation is that … immediately after the handshake, any export controls from the U.S. will be eased, and the rare earths will be released in volume, and then we can go back to negotiating smaller matters,” Hassett said.

The talks come after Trump last week said he had held a lengthy phone call with Chinese President Xi Jinping as both look to avert a full-blown trade war.

Diplomatic efforts by both sides have ramped up after weeks of heightened trade tension and uncertainty after Trump announced sweeping import tariffs on China and other trading partners in April.

Beijing retaliated, and a tit-for-tat escalation in duties ensued before both sides agreed in Geneva in May to temporarily slash duties for 90 days and to facilitate talks. At the time, the U.S. tariff on Chinese imports was cut from 145% to 30%, while China’s levies on U.S. imports were lowered from 125% to 10%.

China and the U.S. have since repeatedly accused each other of violating the Geneva agreement, with Washington saying Beijing was slow to approve the export of additional critical minerals to the U.S., while China criticized the U.S. imposing new restrictions on Chinese student visas and additional export restrictions on chips.

U.S. press secretary Karoline Leavitt on Sunday said that the London talks would focus on moving forward with the Geneva agreement, noting the two sides’ strategic interests in each other’s markets.

Analysts say the Monday talks are unlikely to make much progress in resolving disagreements and sector-specific tariffs targeting a range of strategic industries, ranging from technology and critical minerals to manufacturing and agriculture.

Rebecca Harding, chief executive of the Centre for Economic Security, told CNBC on Monday that China and the United States “are locked in an existential battle at the moment.”

“There’s absolutely no other way of describing all of this, and this is about how data flows. It’s about information. It’s about AI. It’s about tech. It’s about defense too. China’s rapidly expanding its munitions production at the moment. So it’s about how these two economies actually compete and survive in a digital world where nobody really knows what the power of the nation-state is,” she told CNBC’s “Squawk Box Europe.”

“It’s much, much more than just about trade and what’s going on in that domain between the two countries. It’s about how they run their economies. This is only just starting and, effectively, it’s a battle for the 21st century,” she added.

Optimistic that talks are taking place at all, Zhiwei Zhang, president and chief economist of Pinpoint Asset Management, told CNBC that it could take months for trade tensions to be resolved.

“I don’t really have very high expectations for these trade talks … I doubt they will reach an agreement very soon,” he told CNBC’s “China Connection” on Monday.

“There could be some resolution on specific issues, like a rare earths, for instance, China already announced that they will give some permits to foreign firms applying for imports. Now, those kind of a temporary solution, we might see some of that come out. But I doubt we will have a complete solution coming from this dialog in the U.K.,” Zhang added.