USA, China seal rare earths of trade agreements

USA, China seal rare earths of trade agreements

On Friday, the Chinese authorities signaled that they would approved the export of rare earths to the USA, only hours after the White House official had declared that the two sides had reached an agreement. This would be significant progress after weeks of intensive negotiations on the access of the United States to these crucial raw materials.

rare earths: an important commodity

rare earths are indispensable in numerous products from everyday electronic devices to combat aircraft. In the past few weeks, they have increasingly attracted attention in the trade conflict between the two largest economies in the world when the mutual escalation of tariffs turned into a struggle for the supply chains.

china reacts to trade talks

"China will approved the export applications of controlled goods that meet the legal requirements. In return, the United States will eliminate a series of restrictive measures against China," said a explanation of the Chinese Ministry of Commerce.

The explanation was formulated in response to a specific question that aimed at how "China will accelerate the export of rare earths into the United States". This message was followed by US President Donald Trump and his Minister of Commerce Howard Lutnick, who confirmed on Thursday that the two sides had reached an agreement.

an earlier understanding

The agreement seems to formalize an understanding previously achieved in London in London, which at that time had to be approved by Trump and the Chinese head of state Xi Jinping. On Thursday, Lutnick from Bloomberg News was cited with the words: "China will deliver rare earth" and as soon as this has happened, "we will take back our countermeasures", which referred to the export restrictions that the United States imposed in May.

disputes about export controls

At an event in the White House, Trump said on Thursday: "We signed with China yesterday", without further detail. In its explanation on Friday, the Chinese Ministry of Commerce expressed hope that both sides continuously strengthen the consensus, reduce misunderstandings, consolidate the cooperation and together the healthy, stable and sustainable development of economic and trade policy relationships between China and the USA.

China's dominance in the market for rare earths

china controls about 90 % of the global processing of rare earths, according to the international energy authority. Last month, the two countries in Geneva made an agreement to reduce the high tariffs that had led to a factual trade embargo, but this agreement quickly collapsed because the Trump administration was frustrated that China did not stop the previously imposed export controls for rare earths.

contradictory measures and bilateral conversations

sign for loosening

After the talks, Trump announced that an agreement had been reached that was waiting for the approval of both heads of the state, and that both sides had agreed to loosen the export restrictions. Trump also indicated that Chinese students could study again at American universities.

Current developments in trade relationships

This week Reuters reported that the US Ministry of Trade has allowed dealers from Ethan to load Ethan to China on ships. However, they are prohibited from unloading in China without permission - a sign that the experts interpret as an indication that the government is preparing to lift the restrictions. As part of the license regime for double use introduced in April in April

Although China has repeatedly explained in the past few weeks that it had "accelerated" the permits for export licenses for rare earths for "compliant" applications, experts and industry insiders report that many companies still have difficulty securing adequate deliveries of these critical elements and magnets. Analysts also expect that China's export restrictions for double use continue to ban shipping to armaments suppliers, which denies US armaments companies access to these materials.