Regarding the second round of consultations between China and the United States in London today, after the Geneva talks in mid May, the United States will continue to impose chip restrictions on China, while China will implement rare earth export controls, forming a "rare earth VS chip" game pattern. In this second round of consultations, the participation of US Commerce Secretary Lutnick may indicate that technology export controls "may no longer be an non-negotiable area" (which falls under Lutnick's jurisdiction) Both sides have urgency in this second round of negotiations: 1. The rare earth supply in the United States is about to be cut off. According to reports, American car companies have recently complained about a shortage of rare earth magnets, causing car factories to be on the brink of production stoppage. Even the only operating rare earth mine in California, Mount Davis, has to export rare earths to China for refining. 2. Although China's chip control remains a bottleneck, the slowdown in imports and exports caused by tariffs is even more urgent 1) Mainly due to the drag on exports to the United States. In May, exports to the United States were -34.5% year-on-year, further decreasing from the previous value of -21.0%. 2) The monthly year-on-year growth of 4.8% in China's imports and exports in May is still not low; But slightly lower than the 5.7% in the first quarter and 8.1% in April, and also lower than the seasonal level of tariffs and trade environment uncertainty in the same period of history. In this situation, at least both sides have the motivation and urgency to facilitate negotiations. There is a high possibility of reaching further agreements in the second round of negotiations in this situation. The final result actually depends on: What is the potential for further reduction in tariff rates? What is the extent of the relaxation of chip and rare earth control by both parties (such as the lifting of quotas or restrictions on usage)?