China fast-tracks rare earth shipments to US, easing trade tensions
What's the story
The US and China have reached an agreement to speed up the shipment of rare earth minerals to the US. The announcement came from a White House official as part of ongoing efforts to resolve the trade war between the world's largest economies. President Donald Trump had earlier confirmed that the US signed a deal with China on Wednesday, but he didn't provide any further details.
Trade negotiations
China agreed to lift non-tariff countermeasures during trade talks
During US-China trade talks in May, China agreed to lift non-tariff countermeasures against the US since April 2. However, the specifics of how some of these measures would be removed remain unclear. The agreement comes after China's suspension of exports on a range of critical minerals and magnets in retaliation to new US tariffs.
Trade framework
'China will deliver rare earths to us'
A White House official said, "The administration and China agreed to an additional understanding for a framework to implement the Geneva agreement." The understanding is focused on expediting rare earth shipments to the US. US Commerce Secretary Howard Lutnick confirmed this, saying, "They're going to deliver rare earths to us," and once they do that, "we'll take down our countermeasures."
Trade challenges
Long way to go for final trade deal
While this agreement marks a significant step forward after months of trade uncertainty, it also highlights the long way to go for a final trade deal between these two economic powerhouses. China has been careful with its dual-use restrictions on rare earths and has been vetting buyers to prevent diversion of materials to US military uses.
Trade restrictions
Geneva deal stalled due to China's export restrictions
The Geneva deal had stalled due to China's export restrictions on critical minerals, prompting the Trump administration to impose its own export controls. However, in early June, China granted temporary export licenses to rare-earth suppliers of top three US automakers. This came as supply chain disruptions began to emerge from these export restrictions.