China announced that it would resume exports of rare earths to US companies, but it showed its wariness toward the US by limiting the permit period to six months. This implies the possibility that rare earth supply could be further restricted if US-China trade tensions escalate again.
On the 11th, the Wall Street Journal (WSJ) reported this, citing relevant sources. At a recent high-level meeting in London, US Treasury Secretary Scott Besant and Chinese Vice Premier He Lifeng agreed to develop a framework for implementing the agreement reached at the first meeting. President Donald Trump mentioned the lifting of export controls on social media, but did not mention the specifics of the agreement.
The WSJ emphasized that China expressed its intention to maintain control over rare earth supply for future negotiations. In fact, China’s rare earth export controls have served as a powerful negotiating tool in the trade conflict between the US and China, and they are having a huge impact on the automobile, aerospace, and semiconductor industries.
“China will want to maintain its influence, and any agreement could be broken, putting American companies at risk,” warned Gracelyn Baskeren, director of the Center for Strategic and International Studies (CSIS). Earlier, the US and China agreed to significantly reduce tariffs and lift non-tariff measures such as rare earth export controls at high-level trade talks in Geneva, but negotiations have since stalled as both sides claim violations of the agreement.
This further highlights the complexity of the US-China trade relationship, and could have serious repercussions on the global supply chain.
- miTook