[Morning Briefing] China-US Joint Statement Releases Positive Signals; China's Rare Earth Export Controls Continue
![[Morning Briefing] China-US Joint Statement Releases Positive Signals; China's Rare Earth Export Controls Continue](/_next/image?url=https%3A%2F%2Fimg.cls.cn%2Fimages%2F20250513%2FKy41mqxLQQ.png&w=1920&q=75)
News Summary
China and the United States held economic and trade talks in Geneva and issued a joint statement, sending positive signals. Both sides committed to taking measures by May 14, 2025, to modify and cancel some imposed tariffs. Specifically, the US will suspend the 24% ad valorem tariff on certain Chinese goods for 90 days and cancel other tariffs imposed under specific executive orders. China will similarly suspend its retaliatory 24% ad valorem tariff on certain US goods for 90 days and cancel other retaliatory tariffs imposed under specific announcements. Furthermore, China's Ministry of Commerce stated that the high-level China-US economic and trade talks achieved substantial progress, significantly lowering bilateral tariff levels, with the US canceling a total of 91% of its imposed tariffs and China canceling 91% of its retaliatory tariffs. The two sides will establish a mechanism to continue consultations. Concurrently, China is strengthening full-chain control over strategic mineral exports, severely cracking down on smuggling to prevent illegal outflows. Heavy rare earths are included in the export control scope, a move that has raised concerns in the US regarding rare earth supply.
Background
In recent times, China and the United States have faced challenges in their trade relationship, imposing tariffs on each other, which has impacted bilateral trade and the global economy. Strategic minerals, particularly rare earths, have become a focal point of geopolitical and trade friction due to their critical role in high-tech and defense sectors. China holds a dominant position in the global rare earth supply chain, and its export policies significantly influence the global market. Concurrently, China is strengthening controls over the export of strategic minerals to prevent illegal outflows and ensure national resource security.
In-Depth AI Insights
Does the adjustment of China-US trade tariffs signify the end of the trade war? - The tariff adjustments in the joint statement are positive signals, especially the mutual cancellation of 91%, but the retention of some tariffs and the 90-day suspension period suggest this is more a phase of de-escalation rather than a complete conclusion. - The commitment to establish a mechanism for continuous consultation indicates that both sides recognize the need to resolve trade differences through dialogue, but the future trajectory still depends on the progress of subsequent negotiations and changes in the global economic and political environment. What are the deeper implications of China strengthening strategic mineral export controls on global supply chains? - China's dominant position in global rare earth refining and processing means its export policies have direct and significant impacts on downstream industries (such as high-tech, new energy, and defense). - While officially stated as preventing illegal outflows, the crackdown on smuggling and strengthened controls can also be seen as a move, against the backdrop of geopolitical tensions, to further consolidate strategic control over critical resources, increasing the urgency and difficulty for other countries to build independent supply chains. - This may accelerate global efforts towards diversification of rare earth and other strategic mineral supply chains, but could also lead to price volatility and supply tightness in the short term, affecting the operating costs and strategic planning of relevant international companies. What is the takeaway for investors from the coexistence of trade de-escalation and resource controls? - The phase-by-phase de-escalation of trade tariffs may boost confidence in some tariff-affected industries, presenting short-term trading opportunities, especially for import/export companies sensitive to tariffs. - However, the continuation and strengthening of strategic mineral controls remind investors that geopolitical risks have not disappeared, and resource security and supply chain resilience remain key factors to consider in long-term investments. - This reinforces the understanding of China's influence in critical raw materials, potentially enhancing the strategic position and pricing power of relevant listed companies (such as rare earth and strategic metal companies), making them noteworthy.