CAPITAL HILL
Trump declares that a deal has been reached, with China expected to provide rare earth elements.
US President Donald Trump boasted on Wednesday about a pact struck with Beijing in two days of trade discussions, stating that China will provide "magnets, and any needed rare earths" to the economic powerhouse of the world.
Breaking it Down
The bickering over rare earth exports was a significant hurdle in the dialogues in London, and Trump announced that the United States would permit Chinese students to carry on their education at American institutions following the settlement - pending the approval of both Trump and Chinese leader Xi Jinping.
Let's Talk Tariffs
In light of this agreement, it's worth a mention that tariffs were no longer the focus of the standoff. In fact, the 2020 "Phase One" trade deal didn't concentrate on rare earths, but aimed to reduce tariffs and boost Chinese purchases of US goods (reminiscent of a cat and mouse game perhaps).
As for the U.S.- China trade relationship, it's a prolonged chess match. China rules the roost in the global rare earth market, producing and processing a substantial portion of the world's supply. However, the "Phase One" deal only indirectly benefits US rare earth mining and processing industries, via increased American goods' demand.
Moreover, overlapping tariffs have taken a toll on both nations; however, they've steered clear of targeting each other's rare earths specifically. The US strategy has veered towards domestic diversification of rare earths, acknowledging the risks of reliance on Chinese imports. Conversely, China exploits its rare earth dominance in broader economic and strategic moves.
Long story short, the "Phase One" trade deal may not have explicitly focused on rare earths, but it did represent a step towards easing trade tensions between the US and China. The US remains committed to lessening its dependence on Chinese rare earths through in-house development and global alliances. To stay informed about the latest developments, keep an ear to the ground for up-to-date news and official statements coming from both countries.
- The "Phase One" trade deal between the US and China, while not directly focusing on rare earths, served as a step towards reducing trade tensions, particularly in the realm of policy-and-legislation and general news.
- As the US-China trade relationship is a long-term chess match, the commitment to lessen dependence on Chinese rare earths involves not only domestic diversification but also forging global alliances, making it a significant business and politics concern that continues to unfold.
