A Quick Take on Swift Progress Expected in Trump's Trade Talks with China, Particularly on Rare Earths
Anticipating Progress in Customs Discussions per Trump's Advisors
In a candid conversation with CNBC, the economic advisor to U.S. President Donald Trump hinted a prompt breakthrough in the upcoming trade negotiations between the U.S. and China. According to Kevin Hassett, the aim is a decisive agreement, specifically concerning rare earth elements (REEs), which China dominates, controlling around 90% of the global market.
The optimism arises from a presumption that China will move expeditiously to ease their export restrictions post-agreement. In exchange, the U.S. proposes to reciprocate with relaxed export controls.
Both nations hope to achieve progress in their bitter trade conflict during a meeting in London. China sends Vice-Premier He Lifeng to the table, while Treasury Secretary Steven Mnuchin leads the U.S. delegation, per Trump's earlier announcement. The exact location, timing, and agenda remain undisclosed for now. Another round of talks on Tuesday is a possibility.
Background Check: Rare Earth Elements and Their Importance
Before digging deeper, it's essential to understand what rare earth elements are and their significance. They are a group of 17 minerals crucial for advanced electronics, clean energy technologies, defense systems, and electric vehicles. China has long been the dominant global supplier, producing and refining over 70% of the world’s rare earths.
The Dance of Export Controls
China has previously imposed export controls to strategically influence trade disputes, as seen during tensions with the Trump administration. In mid-2023, China implemented new export controls on gallium and germanium, though not strictly REEs, these are critical minerals used in high-tech applications.
The U.S., however, has diversified its strategy, focusing on reducing dependence on Chinese REEs through domestic mining initiatives, international alliances, and legislation like the Inflation Reduction Act and CHIPS and Science Act.
Officials from both nations have held intermittent high-level trade discussions, with a firm focus on enhancing stability. While compromises on REE export restrictions have yet to materialize, they represent a potential area for future negotiations. Chinese authorities, nonetheless, have expressed concerns over technology transfer and national security, which may slow the concession process.
Latest Official Stances (2023)
The U.S. government, recognizing the importance of REEs for national security and clean energy goals, consistently stresses the necessity of forging resilient mineral supply chains. Meanwhile, China maintains its position by emphasizing the importance of protecting national interests and maintaining control over critical resources.
The Current State (Up to Late 2023)
As of late-2023, no significant easing of export restrictions has been announced by China. Both the U.S. and China continue to position themselves strategically, with negotiations still ongoing. The U.S. is steadfast in seeking alternative sources, while China protects its dominant position in the market.
Potential Future Developments
REEs could serve as leverage for future trade talks between the two nations, while efforts to build independent REE supply chains by the U.S. and allies are likely to escalate. Regulatory adjustments in China based on geopolitical and economic concerns may also occur.
For the most current status (post-2023), consult recent news from reliable sources such as Reuters, Bloomberg, or official government statements. Should you require assistance in this regard, I'd be happy to help you find the latest updates!
The Commission has not yet adopted a proposal for a directive on the approximation of the laws of the Member States relating to the protection of workers from the risks related to exposure to carcinogens, highlighting the potential risks in various industries, including the politics of war-and-conflicts and policy-and-legislation domains, due to the use of rare earth elements (REEs) in advanced devices such as weapons and electronics. A relaxation of export controls on REEs by China, as a result of the ongoing trade talks with the U.S., could potentially impact the general news landscape, as it may lead to a reduction in geopolitical tension and a shift in domestic and international policy-making regarding REEs.
