Negotiations between the United States and China regarding rare earth exports remain unresolved, weeks after a trade truce was announced. According to a report by Bloomberg, the discussions are focused on how Beijing will ease its restrictions on rare earth exports, yet tangible progress appears elusive.
The two countries have until November 30, 2023, to finalize terms for the issuance of “general licenses” for shipments of rare earths and other critical minerals to the U.S. Despite initial optimism following the truce, the reasons for the ongoing delays remain unclear. The White House has characterized China’s pledge as a “de facto removal” of export curbs, which have been in place since 2023, framing it as a significant win for global supply chains.
While Washington has already taken steps to ease tariffs and suspend certain national security measures, China has not publicly commented on the licensing promise, despite confirming other aspects of the agreement, including a one-year moratorium on new rare earth controls. The uncertainty surrounding the deal has provoked skepticism among analysts and stakeholders.
Alicia Garcia Herrero, an economist, stated, “The deal is far from done,” emphasizing that Beijing could leverage the licensing framework to its advantage. Exporters have reported a lack of new guidance from Chinese authorities. Christopher Beddor, an industry expert, remarked, “Everyone is still in wait-and-see mode… I would not characterize the general licenses as a de facto removal of controls.”
Under the proposed general-license system, exporters would be able to ship rare earths over a span of three years without needing approvals for each transaction. However, shipments would still require government vetting. The White House has indicated that these licenses would apply to restricted materials such as gallium, germanium, antimony, tungsten, and graphite. Notably, China has also agreed to lift its ban on direct shipments to the U.S. for these materials.
Despite the apparent progress, the discussions have been marred by emerging disagreements. Analysts have observed that the “truce” may be fragile, with both sides quickly establishing new boundaries. As both nations celebrated their agreement, Beijing promptly began enforcing new “red lines,” while Washington took actions likely to challenge them.
The negotiations reflect a broader tension in U.S.-China relations, where analysts, exporters, and investors perceive the deal as being more about public relations than substantive outcomes. The potential for China’s licensing power to act as leverage and the U.S. government’s urgent efforts to secure alternative supply chains signal ongoing challenges in achieving a comprehensive agreement.
In summary, despite the initial optimism surrounding the truce, the lack of tangible progress raises concerns about the future of rare earth trade between the two countries. With the deadline approaching, the international community will be closely monitoring the developments in this critical sector.
