U.S. trade deal, allegedly finalized by Trump, seemingly underplayed by China.
Hong Kong and London Whispers – A Trade Deal Seems in the Works, But What's the Real Story?
There's a buzzing gossip mill in Hong Kong and London over a supposed trade deal between the U.S. and China, focusing on export restrictions for rare earths and semiconductors. But let's cut through the rumors and get down to the nitty-gritty.
At a recent press conference, a Chinese Commerce Ministry spokesperson appeared rather nonchalant about President Trump's claims that a trade deal had been struck. They characterized the trade negotiations as merely establishing a "framework" to build upon the agreements reached in Geneva last May. The event in the U.K. marked the "first meeting," they said, implying that there's still a long way to go.
Trump had taken to Truth Social, his preferred platform of choice, to announce a triumphant deal, stating that "our deal with China is done, subject to final approval with President Xi and me." However, details about the deal remain elusive. The spokesperson offered little insight, simply acknowledging that "new progress was also made in addressing each side's trade concerns."
When addressing rare earths, the spokesperson hinted at China's discretion in granting export licenses based on "reasonable needs." They were quick to note that "compliant applications have already been approved."
But Trump's boasts of a "total of 55% tariffs" and "full magnets and any necessary rare earths, will be supplied, up front, by China" seem to be taking things a bit too far. The truth seems to be far more nuanced than a simple agreement.
In truth, as of the latest intel in 2023, a specific, comprehensive trade deal between the U.S. and China focusing solely on rare earths and semiconductors is yet to materialize. These sectors, however, have been hot topics in broader trade negotiations between the two global economic titans.
Rare earths are a family of 17 elements critical in advanced technologies like electronics, renewable energy systems, and military applications. China holds the reins as the world's top producer, controlling a significant chunk of the global supply. Semiconductors, on the other hand, are indispensable for modern electronics, including computers, smartphones, and automotive systems. With the U.S. and other countries aiming to loosen their grip on China's semiconductor supply chains, the stakes couldn't be higher.
The first major agreement between the two countries was the Phase One Trade Deal signed in 2020, which included provisions for China to bolster its purchases of U.S. goods, including some high-tech products. However, these provisions didn't go into specifics regarding rare earths or semiconductors. Additionally, China has at times imposed export restrictions on rare earths as leverage in trade disputes, but these have been limited and not part of a formal trade agreement with the U.S.
As the present unfolds, both countries continue to engage in calculated efforts to address trade tensions and protect their strategic interests. Specific concessions or detailed agreements on rare earths and semiconductors, however, remain part of broader diplomatic discussions rather than standalone trade deals. The landscape is likely to continue evolving as both countries endeavor to diversify their supply chains and reduce their dependencies on each other for critical technologies.
For the most up-to-date information, it's best to follow the latest news and updates from reliable sources, as negotiations between these two economic powerhouses unfold. The dance between them is a delicate one, and only time will reveal the tune they'll ultimately choose to waltz to.
A quick shout-out to our talented team members Kevin Shalvey and Britt Clennett for their contributions to this report.
- The trade negotiations between the U.S. and China, centering on export restrictions for rare earths and semiconductors, are part of broader international finance and business discussions, with implications in political and general-news arenas.
- While there have been recent meetings and some agreements established, a comprehensive trade deal focusing solely on rare earths and semiconductors remains elusive, with the negotiations still ongoing and the details yet to be finalized.
