Introduction: US-China trade talks in London today
Good morning, and welcome to our rolling coverage of business, the financial markets, and the world economy.
London is playing host to the latest stage in the US and China’s efforts to agree a trade deal.
Top US and Chinese officials are due to meet in the UK capital today, in an attempt to build on the preliminary agreement reached last month in Geneva, with rare-earth minerals and advanced technology likely to be high on the agenda.
Both sides are sending senior representatives – the US delegation is being led by Treasury secretary Scott Bessent, commerce Secretary Howard Lutnick and US trade representative Jamieson Greer. Vice premier He Lifeng leads China’s team.
Investors, and leaders, around the globe will hope that the two superpowers can cool their dispute; they’re currently partway through a 90-day truce which reduced the new tariffs between the pair to 10%.
Yesterday, a UK government spokesman said:
“The next round of trade talks between the U.S. and China will be held in the UK on Monday.
“We are a nation that champions free trade and have always been clear that a trade war is in nobody’s interests, so we welcome these talks.”
The meeting follows a phone call between Donald Trump and Xi Jinping last week, in which Xi reportedly told Trump to “withdraw the negative measures” which the US has taken against China”.
Reminder: a week ago, China accused the US of “seriously violating” their Geneva pact, after Washington complained that Beijing had not delivered on promises to roll back restrictions on the export of key critical minerals to the US.
The sight of the two sides meeting again may cheer markets, which “are sniffing out the scent of détente”, according to Stephen Innes, managing partner at SPI Asset Management.
Innes writes:
This isn’t your typical trade theatre. Forget the pomp of Mar-a-Lago photo ops—this is trench diplomacy in Savile Row suits, with both sides recognizing that the clock is ticking. Trump needs market serenity to maintain the illusion of economic strength heading into the Summer.
At the same time, Xi navigates a domestic economy riddled with landmines in the property sector and a consumer base still struggling to recover from the pandemic. That creates a mutual incentive to tone down the tariff tantrums and cue up the handshake optics—even if no signatures are signed.
The agenda
Key events
Photos: Lex Greensill arrives at the High Court for Credit Suisse – SoftBank battle
Over at London’s High Court, Australian financier Lex Greensill has arrived to testify at a $440m legal battle between Swiss lender Credit Suisse and Japanese conglomerate SoftBank.
Greensill is the founded of supply-chain finance specialist Greensill Group, which lent money to companies by buying their invoices upfront. It collapsed in March 2021, a blow to Credit Suisse, which had lent the company money, and was forced to winded down specialist funds worth $10bn (£7.2bn) that were mostly invested in loans linked to Greensill.
Credit Suisse is suing Softbank over funds which Greensill Group lent to Katerra, a SoftBank-backed U.S. construction group.
Lex Greensill and Eric Varvel, former chairman of Credit Suisse’s investment bank, are among the key witnesses expected to testify at the trial.
Reuters has more details of the case:
The lender alleges that Greensill, at SoftBank’s behest, gave up rights to Katerra’s debts in return for shares which it then passed on to a SoftBank Group entity, leaving Credit Suisse out of pocket in relation to $440 million of notes.
Lawyer Sonia Tolaney, representing the Credit Suisse fund that held the notes, said SoftBank was heavily exposed to both Greensill and Katerra, to a total of around $3.5 billion, and “needed to protect the value of its investments”.
SoftBank, however, says the lawsuit lacks merit and is simply an attempt by Credit Suisse to “pin blame (on SoftBank) for a loss caused by their own negligence and risk-taking”.
Lisa O’Carroll
This US Geological Survey from January 2025 showing production and reserves of rare earth oxide equivalents illustrates the sheer dominance of China in this sector.
It notes, in footnote 14, that this does not include undocumented supplies.
China state media: He-Reeves meeting took place yesterday
Helen Davidson
China’s vice premier He Lifeng met with UK chancellor Rachel Reeves in London on Sunday, Chinese state media has just reported.
According to a readout published by state broadcaster, CCTV, the two exchanged “in-depth views” on the bilateral economic relations and “issues of common concern to both sides”.
The readout was in Chinese, and below is a machine translation from my colleague Helen Davidson in Taipei.
“He Lifeng said that China and the UK should work together to implement the important consensus reached by President Xi Jinping and Prime Minister Starmer, promote the implementation of the results of the China-UK Economic and Financial Dialogue, further deepen exchanges and cooperation in various fields of economy and finance, promote mutual benefit and win-win results, and maintain the continued healthy and stable development of China-UK economic relations.
Reeves said that the UK attaches great importance to cooperation with China and is willing to strengthen communication with China to implement the results of the UK-China Economic and Financial Dialogue and inject new impetus into UK-China economic cooperation.”
The meeting came a day before He is set to meet US counterparts for UK-hosted talks today, to try and return to peaceful negotiations over the tariff war.
Investors have not been spooked by today’s customs data, showing that China’s exports to the United States sank fell nearly 10% in May, year-on-year.
Chris Beauchamp, chief market analyst at IG, explains:
Trade tensions between the US and China were reflected in the weekend’s China data, but with fresh trade talks taking place in London today the reaction from investors has been a collective shrug.
Even data that does show tariffs have had an impact is being discounted, given the abrupt volte-face performed by the US administration since 2 April. Despite all expectations to the contrary, stock markets seem content to keep pushing higher.
Lisa O’Carroll
China has a rare earth and critical minerals card it can play whenever it wishes.
If it doesn’t own the raw material, it processes it – a strategy that has seen it, for example, dominate the world’s supply of lithium hydroxide, used in batteries for electric vehicles.
Turning on and off supplies can impact manufacturing across the globe, particularly in the auto sector.
It is estimated that it controls up to 70% of global rare earths, 85% of refining capacity and 90% of rare earth metal alloys and magnet production.
The European car manufacturing trade association, Comité de Liaison des fabricants d’Equipements et de Pièces Automobiles (Clepa), said the lack of supply of rare earths was already “shutting down production” in Europe.
“With a deeply intertwined global supply chain, China’s export restrictions are already shutting down production in Europe’s supplier sector,” said Benjamin Krieger, secretary general of CLEPA.
“We urgently call on both the EU and Chinese authorities to engage in a constructive dialogue to ensure the licensing process is transparent, proportionate, and aligned with international norms.”
The EU has launched initiatives including the Critical Raw Materials Act to boost European rare-earth sources but it doesn’t address the stranglehold of China directly.
Last week European commission vice president Maros Šefčovič raised the export restrictions on seven rare earths at an OECD meeting with Chinese commerce minister Wang Wentao.
On Saturday, China’s Ministry of Commerce said it was willing to establish a “green channel” for eligible rare earth export license applications to expedite the approval process to EU firms. That could be a reprive to the car sector, with Beijing hoping the EU would take “reciprocal steps”….
Lutnick’s presence shows focus on rare earths
Lisa O’Carroll
The presence of US commerce secretary Howard Lutnick at today’s talks in London is seen as directly related to China’s export ban on rare earth minerals and permanent magnets, critical in aerospace, military and semi-conductor companies worldwide, my colleague Lisa O’Carroll reports.
After the call between Donald Trump and Xi Jinping last week, their first since Trump’s inauguration in January, the US said Xi had agreed to resume shipments of rare earths to the US, breaking the logjam needed for talks to resume.
The US had accused China of breaching the fragile truce agreed at their previous talks in Geneva with the export ban.
The inclusion at the London talks of Lutnick, whose agency oversees export controls for the US and is taking charge of Trump’s sectoral tariff strategy, is an indication of how central the issue has become for both sides.
Lutnick did not attend the Geneva talks, at which the countries struck a 90-day deal to roll back some of the triple-digit tariffs they had placed on each other since Trump’s inauguration.
The two sides, who are meeting at an as yet undisclosed venue in London, are expected to continue talks into Tuesday.
Trump said on social media the talks focused primarily on trade led to “a very positive conclusion,” setting the stage for Monday’s meeting.
Trade data today has shown that exports of goods to the US fell by over 34% in May year on year, the steepest decline since 2020.
According to China’s General Administration of Customs, the total trade volume between China and the US reached nearly $688.3bn last year, a year-on-year increase of 3.7%.
The slowdown may have contributed to Beijing’s willingness to meet in London for more trade talks, experts said.
🇨🇳🇺🇸China’s Export Growth Misses Forecasts Despite Tariff Truce With U.S.
China’s export growth in May fell short of expectations, despite a temporary trade truce with the U.S. that prompted firms to frontload shipments during a 90-day suspension of steep tariffs. Customs data… pic.twitter.com/zYKMKbaDn6— CN Wire (@Sino_Market) June 9, 2025
European stock markets have opened cautiously, as investors hope for signs of progress in the US-China trade talks later today.
The UK’s FTSE 100 share index has dipped by 2 points, or 0.03%, to 8835 points, pulled down by WPP (now -2.2%).
France’s CAC is 0.05% lower.
WPP boss Mark Read steps down
Shares in advertising group WPP have dropped after it announed its CEO, Mark Read, is stepping down later this year.
WPP told the City this morning that Read will retire on 31 December 2025, ending a 30+ year career at the company.
Read has been under pressure, with WPP’s shares falling to a five-year low earlier year, as the advertising industry has been hit by cautious clients cutting back spending, and the rise of artificial intelligence technologies.
It emerged last week that Meta, the owner of Facebook and Instagram, will help advertisers to fully create and target campaigns using artificial intelligence tools by the end of next year.
Philip Jansen, who was appointed chair of WPP last year, says:
“On behalf of the Board, I would like to thank Mark for his contributions not only as CEO but throughout his more than 30 years of leadership and service to the Company.
During that time Mark has played a central role in transforming the Company into a world leader in modern marketing services, with deep AI, data and technology capabilities, global presence and unrivalled creative talent, setting WPP up well for longer-term success.
Shares in WPP have dropped 1.6% in early trading, to the bottom of the FTSE 100 leaderboard.
UK banks to experiment with Nvidia AI in ‘supercharged sandbox’ scheme
Kalyeena Makortoff
The UK’s financial regulator is to allow banks and other City firms to experiment with the US chipmaker Nvidia’s leading AI products to “speed up innovation” and fulfil government orders to boost UK growth.
The Financial Conduct Authority (FCA) has just announced it is launching a “supercharged sandbox” that would give successful applicants the chance to experiment safely with cutting-edge AI under the watchdog’s supervision, allowing them to use Nvidia’s accelerated computing products.
The regulator is not dictating what those experiments might be, but some firms have previously suggested that AI could be used to identify and intercept authorised push payment fraud, in which victims are tricked into sending money to criminals’ bank accounts, or help identify stock market manipulation.
The FCA’s chief data, intelligence and information officer, Jessica Rusu, said:
“This collaboration will help those that want to test AI ideas but who lack the capabilities to do so. We’ll help firms harness AI to benefit our markets and consumers, while supporting economic growth.”
The AI sandbox programme is open to applications, with plans to begin operating in October, nearly a year after the chancellor, Rachel Reeves, ordered the FCA to encourage more risk-taking across the City to help spur growth and competitiveness.
China’s foreign ministry reported over the weekend that vice-premier He Lifeng will be in the UK until Friday.
They said:
At the invitation of the UK government, Member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council He Lifeng will visit the UK from June 8 to 13.
While in the UK, he will hold the first meeting of the China-U.S. economic and trade consultation mechanism with the U.S. side.
Chancellor Rachel Reeves is expected to hold a bilateral meeting with He this week.
Qualcomm to buy UK’s Alphawave for $2.4bn
There’s a flurry of takeover excitement in the City this morning, where US chipmaker Qualcomm has secured a deal to buy UK semiconductor designer Alphawave in a $2.4bn deal.
The two companies have agreed takeover terms, with Qualcomm paying 183p in cash for each Alphawave share; they closed at 149p on Friday night.
That’s almost double Alphawave’s share price at the end of March, the day before Qualcomm revealed it was considering an offer.
The Alphawave board has unanimously recommended the deal, under which shareholders can choose to exchange their stock for Qualcomm, rather than taking cash.
Alphawave designs chips that allow high-speed data transfer, which are used in data centers which train and run artificial intelligence technology.
Today’s deal means the London stock market will lose another company to an overseas buyer, depleting its stock of tech firms.
Cristiano Amon, president and chief executive officer of Qualcomm, says Alphawave’s high-speed wired connectivity and compute technologies will complement Qualcomm’s power-efficient CPU and neural processing unit cores, adding:
Qualcomm’s advanced custom processors are a natural fit for data centre workloads. The combined teams share the goal of building advanced technology solutions and enabling next-level connected computing performance across a wide array of high growth areas, including data centre infrastructure.“
China’s stock market has risen slightly today, amid hopes that today’s trade talks in London might yield progress.
The CSI 300 index is up 0.25%, while the Shenzhen Composite has gained 0.8%.
There are larger gains in South Korea, where the KOSPI index has jumped 1.7%. Hong Kong’s Hang Seng has gained 1.1%.
The outcome of these discussions will be “crucial” for market sentiment, reports Kathleen Brooks, research director at XTB.
Rare earth shipments from China to the US have slowed since President Trump’s ‘Liberation Day’ tariffs in April. The US wants these shipments to be reinstated, while China wants the US to rethink immigration curbs on students, restrictions on access to advanced technology including microchips, and to make it easier for Chinese tech providers to access US consumers.
A trade agreement between China and the US could calm fears about the economic fallout from US tariff plans, although it is still worth noting that an agreement between the US and the EU is conspicuous by its absence.
Oof! China’s factories are slashing prices at the fastest rate in almost two years, as trade war tensions hit demand.
China’s producer price index fell 3.3% in May from a year earlier, worse than a 2.7% decline in April and the deepest contraction in 22 months, National Bureau of Statistics data showed on Monday.
The PPI index measures prices ‘at the factory gate’, so is a good gauge of demand for goods.
China’s inflation rate sticks at -0.1%
China has slipped further into deflation territory, underlining the importance of agreeing a trade deal with the US.
China’s consumer prices fell for a fourth consecutive month in May, new data from the National Bureau of Statistics shows.
The CPI index fell by 0.1% in May compared with a year ago, indicating a small drop in prices over the last 12 months. That suggests Beijing’s stimulus measures are not boosting domestic consumption and demand.
The annual CPI index has now been in negative territory since February, when it fell 0.7% year-on-year, follows by 0.1% drops in March and April.
Introduction: US-China trade talks in London today
Good morning, and welcome to our rolling coverage of business, the financial markets, and the world economy.
London is playing host to the latest stage in the US and China’s efforts to agree a trade deal.
Top US and Chinese officials are due to meet in the UK capital today, in an attempt to build on the preliminary agreement reached last month in Geneva, with rare-earth minerals and advanced technology likely to be high on the agenda.
Both sides are sending senior representatives – the US delegation is being led by Treasury secretary Scott Bessent, commerce Secretary Howard Lutnick and US trade representative Jamieson Greer. Vice premier He Lifeng leads China’s team.
Investors, and leaders, around the globe will hope that the two superpowers can cool their dispute; they’re currently partway through a 90-day truce which reduced the new tariffs between the pair to 10%.
Yesterday, a UK government spokesman said:
“The next round of trade talks between the U.S. and China will be held in the UK on Monday.
“We are a nation that champions free trade and have always been clear that a trade war is in nobody’s interests, so we welcome these talks.”
The meeting follows a phone call between Donald Trump and Xi Jinping last week, in which Xi reportedly told Trump to “withdraw the negative measures” which the US has taken against China”.
Reminder: a week ago, China accused the US of “seriously violating” their Geneva pact, after Washington complained that Beijing had not delivered on promises to roll back restrictions on the export of key critical minerals to the US.
The sight of the two sides meeting again may cheer markets, which “are sniffing out the scent of détente”, according to Stephen Innes, managing partner at SPI Asset Management.
Innes writes:
This isn’t your typical trade theatre. Forget the pomp of Mar-a-Lago photo ops—this is trench diplomacy in Savile Row suits, with both sides recognizing that the clock is ticking. Trump needs market serenity to maintain the illusion of economic strength heading into the Summer.
At the same time, Xi navigates a domestic economy riddled with landmines in the property sector and a consumer base still struggling to recover from the pandemic. That creates a mutual incentive to tone down the tariff tantrums and cue up the handshake optics—even if no signatures are signed.
