US President Donald Trump recently announced that during a significant phone call with Chinese leader Xi Jinping, they agreed to restart the flow of essential rare earth materials. This announcement comes as a new round of US-China trade talks is set to take place in London on Monday.
The phone call, which lasted 90 minutes, marked an important step towards resuming negotiations that had stalled due to mutual allegations of violating a truce agreement established in Geneva last month. A major contention for the US has been China’s export restrictions on rare earth materials, which are vital for various industries, including automotive and defense sectors.
Trump highlighted the complexity of the negotiations concerning rare earth magnets, although specific details regarding the agreement on exports were not disclosed. He asserted that Xi had agreed to resume the flow of these crucial materials, but he did not clarify how quickly or in what quantity this would occur.
Interestingly, the Chinese government did not mention rare earths in their official summary of the call. Instead, they reaffirmed their compliance with the trade agreement. A spokesperson for the Chinese foreign ministry referred questions about the export flow to relevant agencies, indicating an air of ambiguity on the Chinese side regarding commitments made during the call.
Reports suggest that while some Chinese suppliers have been granted six-month export licenses, uncertainty persists due to a backlog of applications. Chinese experts indicated that the power China wields through its dominance in the rare earth supply chain could be used strategically in future negotiations, particularly in response to US export controls on technology affecting China’s access to advanced semiconductors.
Amid these tensions, the situation remains critical as American businesses face potential shortages of rare earth materials, with 75% of companies surveyed by the American Chamber of Commerce in China warning of depleting stocks within three months. This highlights the urgent need for a resolution regarding trade and export controls.
Looking forward, experts have noted a positive outlook for negotiations, with the prospect that US restrictions on technology exports could become a topic for discussion. As trade talks progress, the hope is that constructive dialogue will lead to mutually beneficial solutions that stabilize the market and improve relations between the two global powers.