AsianFin -- While the Trump administration on Wednesday touted deals on rare earth exports with China, Beijing was reported to just grant the temporary export license.
Credit：the Global Times
China is putting a six-month limit on rare-earth export licenses for U.S. automakers and manufacturers, The Wall Street Journal reported on Wednesday, citing people familiar with the matter. Beijing wants to retain its chokehold on the critical minerals to give it valuable ammunition for future negotiations, according to the sources.
It was reported that during the two-day meeting in London, U.S. negotiators agreed to ease some recent restrictions on sales to China, such as jet engines and related parts, as well as ethane, in exchange for China’s restoring rare-earth licenses. During the meeting earlier this week, China was said to agree to approve applications for rare-earth licenses from U.S. companies right away pending the signoff of U.S. President Donald Trump and Chinese leader Xi Jinping on the trade framework. Details of the framework are still being worked out, according to the report.
Trump in a social media post earlier Wednesday announced that a trade deal with China "is done, subject to final approval", and under the deal, China will supply rare-earth minerals and magnets “up front,” in return, U.S. will “provide to China what was agreed to, including Chinese students using our colleges and universities.” Trump didn’t provide details of terms and just described the relationship between two countries as “excellent.”
U.S. Commerce Secretary Howard Lutnick the same day said in a CNBC interview that Beijing will “approve all applications for magnets from United States companies right away.” Lutnick, one of the U.S. negotiators during the trade talks from Monday to Tuesday in London, said the takeaway from this week’s negotiations was that “they set up the Geneva truce.”
China’s slowing-rolling rare earth exports drew U.S. retaliation including a crackdown on visas for Chinese students at U.S. universities, according to Lutnick. But the phone between Trump and Chinese President Xi Jinping last week “changed everything,” said the Secretary.
China and the United States have agreed in principle the framework for implementing consensus between the two heads of state during their phone talks on June 5, as well as those reached at Geneva talks, China’s state news agency Xinhua cited Li Chenggang, China international trade representative with the Ministry of Commerce and vice minister of commerce.
Li described the trade talks over the past two days as professional, rational, in-depth and candid exchanges, Xinhua reported on Tuesday, adding that Li made the remarks when briefing the press following the first meeting of the China-U.S. economic and trade consultation mechanism held in London. Li told reporters Chinese and U.S. negotiating teams would take the framework on trade back to their leaders, according to Reuters.
Lutnick on Tuesday said U.S. representatives would take the trade framework back to Trump for his approval and then hope for enforcement of the new agreement. Calling the framework as a “first step”, Lutnick said “we had to get the negativity out.” He expected the trade framework and implementation plan agreed in London to lead to China’s curbs on rare earth and magnets exports being resolved.
