The United States has reached an agreement with China on how to accelerate the supply of rare earth metals to the US, a White House representative said on Thursday amid efforts to end the trade war between the world's largest economies, writes Reuters.
President Donald Trump previously stated that the United States signed an agreement with China and announced a separate agreement that will "open" India.
"We just signed an agreement with China yesterday. We have some wonderful deals coming up. We might have a deal with India. Very big. We will open [for US business] India. In the China deal, we are starting to open [for US manufacturers] China," Trump said on Thursday.
During trade negotiations between the US and China held in May in Geneva, Beijing committed to lifting non-tariff countermeasures imposed against the US since April 2. In response to new US tariffs, China suspended the export of a wide range of important minerals and magnets, disrupting supply chains crucial for automakers, aerospace manufacturers, semiconductor companies, and military contractors worldwide. Representatives of the two countries are now working on algorithms to "resume accelerated supplies of rare earth metals to the US".
US Commerce Secretary Howard Lutnick, as reported by Bloomberg, stated that once the supply of rare earth metals is established, the US will lift its countermeasures.
On Friday, China's Ministry of Commerce stated that the two countries recently confirmed the details of a framework agreement to implement the consensus reached at the Geneva trade talks. The statement said that China would approve applications for the export of controlled goods in accordance with the law. Rare earth metals were not mentioned in the statement.
Although the agreement indicates possible progress after months of trade uncertainty and disruptions since Trump took office in January, it also shows that a final trade agreement between the two economic rivals is still far off.
According to an industry source, China takes restrictions on the dual-use of rare earth metals "very seriously" and thoroughly checks buyers to ensure that the materials will not be used for US military purposes. This has slowed down the licensing process.
The Geneva agreement failed due to China's restrictions on the export of important minerals, prompting the Trump administration to respond with its own export restrictions, prohibiting the supply of semiconductor design software, aircraft, and other goods to China.
In early June, Reuters reported that China issued temporary export licenses to rare earth metal suppliers for the three largest American automakers, according to two sources familiar with the situation, as export restrictions on these materials began to cause supply chain disruptions.
Later, Trump stated that an agreement was reached with China under which Beijing would supply magnets and rare earth minerals, and the US would accept Chinese students in its colleges and universities.
Photo: Reuters