China to fast-track mineral exports to US, says treasury chief

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    BANGKOK — In a significant development between the U.S. and China, both nations have finalized a trade agreement facilitating American companies’ access to vital magnets and rare earth minerals sourced from China, crucial for manufacturing and microchip production. This significant breakthrough was confirmed by U.S. Treasury Secretary Scott Bessent during a media appearance on Friday.

    This agreement emerges in the wake of China’s response to the stringent import tariffs imposed by the previous U.S. administration. These tariffs had escalated tensions, leading China to slow down the export of these essential minerals. As a result, this new agreement marks a step towards normalizing trade between the two economic powerhouses.

    According to Bessent, a pivotal phone conversation took place earlier between President Donald Trump and Chinese President Xi Jinping, setting the stage for detailed discussions between delegations from the two countries in London. These discussions culminated in the agreement, allowing a smoother flow of magnets.

    Bessent emphasized the importance of the trade agreement, noting that it would reduce tariffs and ensure consistent supply of rare earth magnets to the U.S., which form a core part of the industrial infrastructure. This resolution follows an announcement by President Trump earlier, stating a mutual understanding with China to facilitate the exportation of these critical elements. This agreement paves the way for further trade dialogues to continue.

    While the U.S. previously restricted some technology sales to China—especially components for advanced manufacturing such as semiconductors—the agreement indicates a shift towards de-escalation of tensions. Commerce Secretary Howard Lutnick underscored the significance of this deal, confirming its signing earlier this week.

    China’s Commerce Ministry acknowledged the agreement and confirmed that both sides had ironed out the details, particularly around speeding up rare earth exports to the U.S. The Ministry stated that China would evaluate export applications according to regulations, while the U.S. would ease several trade restrictions previously in place.

    The foundation for these negotiations was laid in Geneva, where both nations deferred steep tariff increases threatening to stifle bilateral trade. The subsequent London talks established a negotiation framework, ultimately leading to the current formal agreement.

    Despite these advances, China’s earlier decision to impose a permitting requirement on several rare earth elements remains a sticking point. This legal stipulation threatens to prolong the shipment process, potentially disrupting production in crucial sectors like automotive and technology.

    However, China retains the latitude to adjust the approval process, adding an element of flexibility to address any arising geopolitical tensions. Sun Yun, a prominent analyst, observed that China’s policy maintains its overall stringent nature on rare earths, granting discretionary power in its execution.

    In parallel developments, China has recently addressed concerns over the fentanyl crisis, notably designating additional substances as precursors, subjecting them to more rigorous control measures. This move comes in response to U.S. demands for more proactive measures in stemming the flow of these chemicals to illegal manufacturers.

    This newly struck agreement, originating from the discussions in Geneva, advocated for scaling back punitive tariffs that had escalated when the U.S. imposed steep import duties. Nonetheless, some heightened tariffs, linked to strategic issues like fentanyl and raw materials such as aluminum and steel, remain in force.

    The dynamic and rapidly shifting trade policies continue to exert pressure on both the U.S. and China, the world’s two largest economies. The U.S. recently experienced a contraction in its economy, partially due to anticipatory purchases by consumers and businesses ahead of anticipated tariffs. Similarly, Chinese industries, particularly automotive manufacturers, recorded significant profit declines.

    Moving forward, U.S. officials, including President Trump, have expressed optimism about reaching similar trade agreements with other nations, broaden future trade landscapes. Commerce Secretary Howard Lutnick echoed these sentiments, asserting multiple forthcoming deals with various countries, potentially reshaping global trade dynamics.