After Trump's Chat with Xi, U.S. Eyes Swift Pact with China on Rare Earths Exports
U.S. pursuing swift mining collaboration with China for rare earth elements
In a whirlwind of negotiations, the U.S. is optimistic for a swift agreement with China following a conversation between President Trump and President Xi. As reported by the U.S. team, today could witness the revoking of the export ban on precious rare earth elements in London. Talks continue as we speak.
The U.S. strives to establish a solid deal regarding rare earths in its trade negotiations with the economic giant of Asia. A "quick-fire deal" may be sealed in London, as per the words of Larry Kudlow, Director of the National Economic Council. This would mark the completion of the commitments made between President Trump and his Chinese counterpart, Xi Jinping. "The purpose of this gathering is to affirm their commitment, but also to physically seal the deal with a handshake," Kudlow shared with CNBC. It is anticipated that immediately following the handshake, export restrictions will be relaxed, and a flood of rare earths will be released. A brief meeting is anticipated.
Balancing Act Between World Powers
Talks between the world's economic giants commenced late this afternoon. Investors hold their breath in anticipation of further de-escalation in the trade dispute. Since Trump's return to the White House, the Republican has announced escalating tariffs against China, which have been retaliated against aggressively by Beijing. In mid-May, a 90-day truce and significantly reduced tariff rates were agreed upon.
The Global Impact
The U.S. delegation in London is expected to consist of Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross, and U.S. Trade Representative Robert Lighthizer. The Chinese delegation will be led by Vice Premier Liu He. The U.S. government representatives have continuously accused China of breaching its vows concerning the supply of rare earths. Trump recently stated that Xi had agreed in a phone call to resume sending mineral and magnet shipments made from rare earths to the U.S.
China's decision in April to halt exports of a wide variety of critical minerals and magnets has disrupted global supply chains for automakers, aerospace companies, semiconductor firms, and defense contractors.
Contextualizing Rare Earth Elements
First discovered in the early 20th century, Rare Earth Elements (REEs) comprise 17 chemical elements that are indispensable for advanced technology inventions, spanning from electronics and renewable energy systems to military applications. Historically, China's dominance in the production and export of REEs has provided it with considerable influence in global markets.
Strategic Shift in U.S. Policies
The U.S. seeks to lessen its dependence on Chinese imports, including REEs, due to concerns regarding supply chain security and strategic competition. The U.S. has been taking steps to increase domestic production and diversify its REE supply chains.
Timeline for Agreements
Any major agreements or developments involving REEs would likely be part of broader trade or strategic discussions. As of now, there isn't a specific timeline for such agreements being settled, predominantly due to ongoing tensions and strategic considerations.
In conclusion, the state of any U.S.-China deal solely concerning REEs remains uncertain, as negotiations and discussions are typically complex and involve a myriad of strategic and economic factors. For the most up-to-date information, it would be advisable to consult recent news sources or official statements from the U.S. and Chinese governments.
- The U.S. government representatives, including Larry Kudlow from the National Economic Council, are proposing a "quick-fire deal" to secure a solid agreement with China regarding rare earth elements exports, culminating in a handshake and potentially relaxed export restrictions.
- Tensions in the global market have been evident after China's decision to halt exports of critical minerals and magnets, including rare earth elements, affecting industries such as automobile manufacturing, aerospace, semiconductor, and defense sectors worldwide.
