Amid ongoing trade tensions, China and the U.S. have established a framework aimed at enhancing trade relations by facilitating export controls on vital materials.
China and U.S. Finalize Trade Agreement to Ease Export Restrictions
China and U.S. Finalize Trade Agreement to Ease Export Restrictions
China's Ministry of Commerce confirms a deal with the U.S. to boost rare earth exports while lifting some export controls on American goods.
China said on Friday that it officially confirmed the establishment of a trade framework with the Trump administration, which encompasses an agreement to expedite the export of crucial minerals – specifically rare earths – to the United States, while also lifting certain U.S. export controls against China.
In an official statement, China’s Ministry of Commerce announced, “China will review and approve applications for the export of controlled items,” and noted that the United States would reciprocate by cancelling a range of sanctions it previously imposed on China. This statement came after U.S. Commerce Secretary Howard Lutnick indicated to Bloomberg News that trade controls would be removed once China fulfilled its commitment to supply rare earth minerals.
It remains unverified whether this newly confirmed agreement aligns with President Trump’s announcement of a “signed” trade deal with China during a recent White House event. However, the Ministry of Commerce has reported ongoing close communication between Chinese and American trade negotiators, following meetings in London on June 9 and 10, as well as previous discussions in Geneva.
These talks were strategically aimed at stabilizing the increasingly fraught relations between the two giants that have seen them impose heavy tariffs on each other's goods. A significant escalation occurred following the Geneva meeting, during which China’s rare earth exports to the U.S. decreased markedly. As the top supplier and processor of rare earths — essential for a variety of advanced technologies like semiconductors, robotics, and aerospace — any slowing of these exports had prompted the U.S. to impose countermeasures, which included restrictions on U.S. exports of ethane, jet engines, and chip software to China.
This recent agreement comes just days after China tightened controls on two chemicals associated with the illegal production of fentanyl. This maneuver was interpreted as an olive branch to the U.S., which has criticized Beijing for its inadequate efforts to combat the synthetic opioid epidemic.
While the easing of export restrictions is a promising step towards improved trade dynamics, significant challenges remain. The U.S. administration is still pressing for China to increase purchases of American goods and allow greater access for U.S. companies to its economy. Though China has expressed reluctance to yield in the ongoing trade dispute, experts suggest that a broader agreement may ultimately benefit Beijing as it grapples with a sluggish economy challenged by a property crisis and low consumer confidence.
Berry Wang contributed research. David Pierson has covered Chinese foreign policy and its global economic engagement for over two decades.
In an official statement, China’s Ministry of Commerce announced, “China will review and approve applications for the export of controlled items,” and noted that the United States would reciprocate by cancelling a range of sanctions it previously imposed on China. This statement came after U.S. Commerce Secretary Howard Lutnick indicated to Bloomberg News that trade controls would be removed once China fulfilled its commitment to supply rare earth minerals.
It remains unverified whether this newly confirmed agreement aligns with President Trump’s announcement of a “signed” trade deal with China during a recent White House event. However, the Ministry of Commerce has reported ongoing close communication between Chinese and American trade negotiators, following meetings in London on June 9 and 10, as well as previous discussions in Geneva.
These talks were strategically aimed at stabilizing the increasingly fraught relations between the two giants that have seen them impose heavy tariffs on each other's goods. A significant escalation occurred following the Geneva meeting, during which China’s rare earth exports to the U.S. decreased markedly. As the top supplier and processor of rare earths — essential for a variety of advanced technologies like semiconductors, robotics, and aerospace — any slowing of these exports had prompted the U.S. to impose countermeasures, which included restrictions on U.S. exports of ethane, jet engines, and chip software to China.
This recent agreement comes just days after China tightened controls on two chemicals associated with the illegal production of fentanyl. This maneuver was interpreted as an olive branch to the U.S., which has criticized Beijing for its inadequate efforts to combat the synthetic opioid epidemic.
While the easing of export restrictions is a promising step towards improved trade dynamics, significant challenges remain. The U.S. administration is still pressing for China to increase purchases of American goods and allow greater access for U.S. companies to its economy. Though China has expressed reluctance to yield in the ongoing trade dispute, experts suggest that a broader agreement may ultimately benefit Beijing as it grapples with a sluggish economy challenged by a property crisis and low consumer confidence.
Berry Wang contributed research. David Pierson has covered Chinese foreign policy and its global economic engagement for over two decades.
