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Lancaster House, an elaborately designed government mansion located in the capital of the U.K., serves as the venue for the second round of tariff negotiations between the United States and China. Investors and global leaders are closely monitoring these discussions to determine if they can mitigate the risk of an escalating trade war between the two largest economies in the world.

The negotiations extended into a second day on Tuesday, with three of President Trump's senior advisors present. Commerce Secretary Howard Lutnick, Trade Secretary Scott Bessent, and Trade Representative Jamieson Greer are in London, accompanied by Chinese Vice Premier and chief economic representative He Lifeng, who is representing Beijing.

On Monday, President Trump informed reporters at the White House that he was receiving "positive updates" from the negotiations. "We are making progress with China. Engaging with China is challenging," Trump remarked.

The two parties last convened in Geneva in May, where they reached an agreement for a 90-day suspension of the tariffs exceeding 100% that each had imposed on the other as the trade conflict intensified. Some tariffs that were enacted during a previous trade dispute in Trump's first term remain in effect on Chinese products as well.

In general, U.S. tariffs on Chinese goods continue to be higher than those levied on other nations. The U.S. has reduced its base tariffs on Chinese goods to 30%, while China has lowered its tariffs to 10%.

Chinese exports of rare earth minerals, which are essential for automotive manufacturers and various other industries, along with China's access to advanced technology from the U.S., such as computer chips, are significant topics of discussion this time.

Although rare earth minerals are not actually rare, the United States is facing challenges in acquiring them. The American negotiation team has also persistently urged China to increase its purchases of American products