US Commerce Secretary Howard Lutnick said late Thursday that “dealmaker” US President Donald Trump had signed a trade deal with China “earlier this week”. Trump too announced that the two countries had signed a trade agreement “the other day”. Both did not specify any details about the agreement or if the latest deal was different from the one Trump had announced two weeks prior.
China’s Commerce Ministry said on Friday that the two sides had “further confirmed the details of the framework”.
“China will approve the export applications of controlled items that meet the conditions in accordance with the law. The United States will cancel a series of restrictive measures taken against China accordingly. It is hoped that the United States and China will meet each other halfway,” it said, while not explicitly mentioning US access to rare earths.
Also Read: The big trade-off: US to get rare earth; China, its student visas
The US-China trade agreement that was announced two weeks ago, after representatives of the two countries met in London, had paved the way for trade talks to continue after an intense trade embargo followed tariff hikes by Trump soon after he was sworn in as President of the United States in January.
After the London meet, Trump announced China would ease restrictions on the export of the much-needed rare earth magnets, while also agreeing to stop revoking visas of Chinese students in US colleges.
The agreement followed initial talks in Geneva in early May that led both sides to postpone massive tariff hikes that reached almost 145 per cent at one time.
Although China has not announced any new agreements, it announced earlier this week that it was speeding up approvals of exports of rare earths, materials used in high-tech products such as electric vehicles, electronic appliances, mobile phones, robots, wind turbines etc.
Early April, Beijing placed restrictions on the exports of rare earths on many countries, including India.
The Chinese Commerce Ministry said Thursday that Beijing was accelerating review of export license applications for rare earths to the US and had approved “a certain number of compliant applications”.
Export controls of the minerals apparently eclipsed tariffs in the latest round of trade negotiations between Beijing and Washington.
The latest announcement by the US does not mention whether other issues that serve as the bone of contention between the two countries, such as fentanyl exports, are addressed in the trade deal.
China announced last week that it would designate two more substances as precursor chemicals for fentanyl, making them subject to production, transport and export regulations. Trump has demanded that Beijing do more to stop the flow of such precursor ingredients to Mexican drug cartels, which use them to make fentanyl for sale in the US.
He imposed 20 per cent tariffs on Chinese imports over the fentanyl issue, the biggest part of current 30 per cent across-the-board taxes on Chinese goods.
Despite the talks in Geneva calling for scaling back tariff hikes and counter-measures, some higher tariffs, such as those imposed by Washington related to the trade in fentanyl and duties on aluminum and steel, remain in place.
The US economy contracted at a 0.5 per cent annual pace from January through March, partly because imports surged as companies and households rushed to buy foreign goods before Trump could impose tariffs on them.
In China, factory profits sank more than 9 per cent from a year earlier in May, with automakers suffering a large share of that drop. They fell more than 1 per cent year-on-year in January-May.
Trump and other US officials have indicated they expect to reach trade deals with many other countries, including India, which Trump reiterated on Thursday.
“The president likes to close these deals himself. He's the dealmaker. We're going to have deal after deal,” Lutnick said.
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