China agreed to suspend a planned expansion of export controls on rare earth elements (REE) for a year after US President Donald Trump struck a broad trade deal with his Chinese counterpart, Xi Jinping.
The meeting, in the South Korean city of Busan, also saw Trump agree to lower tariffs on Chinese goods from 57% to 47%, news agencies including Agence France-Presse and Reuters reported Thursday. In exchange, Beijing vowed to crack down on fentanyl exports and buying US soybeans, the reports said.
China, which accounts for most of the world’s rare earth production, imposed export restrictions in April on seven REE in response to US tariffs and limits on semiconductors. It added five REE – erbium, europium, holmium, thulium and ytterbium – to the list on Oct. 9, saying it would now require export licences for goods containing even trace amounts of certain elements. The new measures were due to take effect Nov. 8.
“Trade tensions have thawed between the USA and China,” BMO Capital Markets mining analysts Helen Amos and George Heppel said Thursday in a note.
The “rare earth issue has been settled,” CNBC quoted the US president as telling reporters aboard Air Force One. The US administration expects China’s decision to delay the rare earths export restrictions to be “routinely extended,” he added.
Supply chain rebuild
Even so, China won’t be removing the export limits that were introduced in April, CNBC reported Thursday.
Since taking office in January, Trump has led a US push to rebuild a domestic supply chain to lessen the effects of Chinese dominance over the minerals and metals that power the energy transition. China accounts for about 90% of rare earth refining and permanent magnet production, while dominating the production of metals such as copper, lithium and nickel.
Group of Seven nations – which include Canada, France, Germany, Italy, Japan, the UK and the US – are poised to unveil a pact on critical minerals Friday, media organizations such as The Globe and Mail and Bloomberg News reported. Measures should include purchase agreements, stockpiling arrangements and guaranteed minimum prices, they said.
