On Wednesday, the Chinese authorities announced a temporary postponement of restrictions on the export of rare earths and dual-use technologies to 28 American entities. This move comes as the latest action following a temporary trade agreement reached between the US and China during talks in Geneva, where both sides agreed to reduce tariffs, bringing some relief to the tense trade standoff between the two countries.
In the agreement reached on Monday, the US and China agreed to mutually lower tariffs by 115 percentage points within 90 days. In response, China’s Ministry of Commerce announced on Wednesday that the export restrictions initially announced on April 4th and April 9th would be temporarily suspended.
The restrictions by China were aimed at 28 American entities, prohibiting them from importing technologies and materials classified as “dual-use.”
According to the Chinese statement, during this 90-day period, relevant companies can apply to the Ministry of Commerce for export permits and temporarily resume shipments.
While the Chinese Ministry of Commerce’s statement this week did not specifically list out products, the April announcement had clearly included seven rare earth elements in the export control scope classified as “dual-use.” These rare earth elements, including Samarium, Gadolinium, Terbium, Dysprosium, Lutetium, Scandium, and Yttrium, are widely used in semiconductor manufacturing, electric vehicle motors, missile guidance systems, aerospace equipment, and more.
Regarding the temporary trade agreement between the US and China, President Trump described it as a “total reset” in US-China relations, emphasizing Washington’s intention to ease bilateral relations.
However, it is widely believed that this agreement is temporary in nature and mainly serves to create space for further negotiations. Disputes over crucial strategic resources and systemic contradictions between democracy and authoritarianism between the US and China still exist.
In recent years, the US has prioritized reducing its reliance on critical minerals from China.
President Trump declared a “national emergency in energy” on his inauguration day in January, citing high energy prices and reliance on foreign supply chains as national security risks.
In March, he invoked the Defense Production Act to promote the extraction of critical minerals domestically and supported it through federal loans, tax breaks, and industry investment cooperation.
Last month, Trump issued an executive order to conduct a national security investigation on critical minerals under Section 232 of the Trade Expansion Act.
The US government is also seeking to diversify its supply sources overseas, including evaluating the potential of rare earth mineral deposits in Greenland, Ukraine, and the Congo, and advancing long-term plans for deep-sea mining in international waters to ensure future strategic material supply.
The temporary export restriction measures announced by China this time and the mutual tariff reduction arrangement between the US and China are only set for a 90-day period. While it has temporarily eased some pressure, the core issues of the US-China trade war remain unresolved, and uncertainties persist in the progress of subsequent negotiations.
Some experts believe that due to retaliatory measures against the US, Beijing has missed a golden opportunity for over a month to negotiate with the US, and the tariff rate imposed by the US on China remains as high as 30%, much higher than what most other economies face.
As trade agreements between the US and other countries gradually take shape, Beijing will find it harder to garner support. Major American brands are expected to stock up on all Christmas inventory within three months (by August 15th), which could lead the US to impose high tariffs on strategic items and possibly unite with other countries to restrict trade with China.