As we said yesterday, if the United States wants China's rare earths, it must pay a reciprocal price to exchange. Is the US promising to lift three restrictions enough?
The leader of the Sino-US economic and trade team
According to CCTV's "Yuyuan Tantian", on the afternoon of June 9, local time, the first meeting of the Sino-US economic and trade consultation mechanism was held in London, England. On June 10, local time, the representative team of China and the United States will continue to hold a consultation meeting.
The talks were extended to the next day, which was good news for the talks themselves, as senior economic officials from the world's two largest economies tried to resolve a fierce dispute from tariffs to rare earth restrictions threatening global supply chain shocks and slowing economic growth.
The focus of this talk is that China and the United States accused each other of failing to fulfill their promises and that the rare earths the United States wanted were delayed, but in fact, China did not promise to open up rare earths at all. However, after the talks in Geneva, the United States launched a number of restrictions on China, which obviously violated the spirit of the talks.
U.S. President Trump said on June 9 that he was positive about the Sino-US talks and said that the negotiations were going well and that he had only received good reports from his team in London.
Why is Trump so confident? Because in his opinion, he has expressed his "sincerity" to China. The Wall Street Journal quoted people familiar with the matter as saying that Trump has authorized a US delegation to lift U.S. restrictions on chip manufacturing software, jet engine parts and ethane sales.
Kevin Hassett, director of the US National Economic Commission, also made a splash that the United States is seeking China to resume exports of key rare earth minerals. I hope that after this talks, any export controls by the US will be relaxed immediately, and then China will also lift restrictions on rare earth exports. After reaching such a consensus, other small matters will be easier to discuss.
Kevin Hassett, Director of the National Economic Commission
From the reports of US media and the statements of senior White House officials, it is not difficult to see that the US side is indeed a bit "sincerity" in this talk. The US side plans to immediately relax all export controls in exchange for the lifting of the ban on rare earths in China.
I personally expressed a little surprise about the attitude released by the US during the talks. First, I was surprised that our "rare earth card" was so effective; second, the US's concessions can be said to be very exaggerated. Regardless of whether it can be taken into action in the end, the US's statement of lifting all restrictions on China is of great significance, from semiconductor equipment to China-US humanities and education exchanges, covering a very broad content.
At the same time, the report of the New York Times on June 9 also showed the outside world how scarce rare earths are in the United States. The report said that for more than ten years, the United States has not been able to find a rare earth alternative to replace China's supply of this special rare earth. This rare earth is "samarium". It was included in my country in April and is one of the seven major rare earth export control items.
Samarium rare earth magnets are crucial for the manufacturing of missiles, fighter jets, smart bombs, and many other military equipment. For example, Lockheed Martin requires about 23 kilograms of samarium magnets for every F35 production.
To a certain extent, rare earth exports determine the direction of the Sino-US trade war. It is too important. We must get the most important and most wanted things in negotiations in order to allow exports to the United States.
