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When the United States and China have succeeded in one thing this year, it finds the pain points of the other.
An initial collision against tariffs has grown into a competition in recent months in which the country can arm its control over the other’s supply chains.
China has set up rare minerals with global programs, which are essential for the construction of cars, rockets and a variety of electronic products. The United States in turn encouraged China from chemicals, machines and technology including software and components for the production of nuclear energy, aircraft and semiconductors. Since the conflict has escalated in the past few weeks, it has caused Ford Motor and other companies to suspend part of their operations.
Both countries are now trying to find a way to defuse the situation. Outside riders of the two teams meet on Tuesday for a second trade negotiations in the Lancaster House in London, a historical location that has long been a stage for international contracts. They only gathered a few days after President Trump held a 90-minute call with XI Jinping, the Chinese Führer das first time that the two heads of state had spoken directly since Mr. Trump returned to office in January.
When he entered the building on Tuesday, Minister of Commerce Howard Lutnick said that the talks were “good” and that he expected that they would run all day.
The hurry with which the negotiations were arranged reflects the severity of the measures that both countries have recently issued. After Mr. Trump had accumulated the tariffs in China in April, Beijing stuck the exports of critical minerals and magnets and threatened to close the operation of American manufacturers, defense companies and others.
Us and Chinese officials hit a temporary ceasefire in a meeting in Geneva last month to regain tariffs, and, as the Trump government officers assumed, to restart a steady flow of rare earths to American companies. However, the programs of the minerals and the magnets made with them remain rare and densely controlled. At the end of May, Ford temporarily closed a factory in Chicago, in which his Explorer Sport Utility Vehicle is missing due to a lack of magnets.
In response to this, US officials tried to squeeze China by clamping exports into the country, including software for the production of semiconductors, gases such as ethane and buttan as well as core and aerospace components, said people who were familiar with the prohibited. US officials also proposed to increase Chinese students in the United States as part of a coordinated effort to increase the pressure on China before the call between Mr. Trump and Mr. XI.
When calling, Mr. XI warned that the leaders of the United States and China “would have to stay away from various disorders or even sabotage”, apparently an indication of the idea that critics of China in the government of Mr. Trump would have made some of these efforts without his knowledge. According to a person who was familiar with the efforts, the actions with Mr. Trump’s knowledge or in his direction were carried out.
In addition to the finance minister Scott Bessent, who has the talks for the United States, and Jamieson Greer, the US trade representative, includes the American delegation Mr. Lutnick, who is overseas overseas. On the Chinese side, the negotiations of He Lifeng are headed, the deputy prime minister for economic policy.
Since the dispute in the supply chain was promoted, Beijing has set up a system with which licenses for the export of seven rare earth metals and magnets must be requested from them. American companies have hoped that the talks of this week could lead to accelerated license agreements for rare earth magnets or even their inclusion in a “white list”, which would give companies unreserved access.
In the run -up to the talks, Mr. Lutnick asked companies who are looking for rare earths and magnets to a list of their outstanding license inquiries to the Chinese, a person with knowledge of the discussions. He planned to press Chinese officials to give these licenses during the sessions.
Xinhua, China’s official news agency, published an editorial on the regulations for the rare earth of the country on Monday and found that “these measures underestimated the strategic depth of Chinese political decisions as mere short -term negotiation instruments”. It would be “more constructive” for western countries instead to “concentrate on understanding and adaptation to China’s new measures”.
Liza Tobin, Managing Director of Garnaut Global, an advisory company for geopolitical risk, and a former National Security Council Director for China during the first Trump and Biden administration, China said in rare earths about the United States. Beijing used it to roll back the tariffs, but this lever ultimately fell back, said Ms. Tobin.
“Beijing pressed harder, but Washington’s reaction was the exact opposite of what Beijing wanted: an entrepreneur through further export controls,” she said.
A World Bank’s report published on Tuesday underlined the tribute that Mr. Trump’s trade agenda had in the global economy and that production slowed too much this year.
While Mr. Trump occasionally thought about his interest in a broader trade agreement with China, US officials seem to have little optimism that the two sides could make progress in the direction of a comprehensive agreement, especially if the dispute on the supply chain has approached.
In CBS ‘”Face the Nation” on Sunday, Kevin Hassett, an economic advisor to the White House, said Mr. Trump suggested during the call to Mr. XI that officials from the countries meet in order to “clarify” and “give his hand”.
“The point is that we are the rare earth, the magnets that are of crucial importance for mobile phones and that everything else is crucial, just like before the beginning of April,” said Hassett.
The Chinese government has denied that its rare earth measures are aimed at the United States. A spokesman for the Chinese Ministry of Commerce announced on Saturday that rare earth -related objects had both civil and military applications and that export controls agreed with international practices to ensure national security and national interests.
In many factories in the United States, Europe and Japan, it quickly goes out of the magnets, for which China produces 90 percent of the world offer.
The Ministry of Commerce has started creating more export licenses in the past two weeks. On Saturday it was said that it could be willing to accelerate the approval of rare earths to Europe, and also asked the European Union to lift some of its own tariffs and restrictions on the trade in China.
A persistent question is how long China needs rare earth processing centers and magnetic factories to improve deliveries, even if a deal is completed in London. The mineral processing centers and magnetic factories in southern China, in which five of the seven restricted rare earths were broken down and transformed into magnets, were visibly closed during a visit in April.
But on Monday in Baotou, a mining center in northern China, the world’s dominating producer of Samarium was the now limited rare earth, which is essential for fighter planes and rockets. A strong smell of ammonia and other chemicals hung in the air outside the refineries of the rare earth of the city, a sign that at least a few processes ran.
The United States and China continue to save other topics. US officials criticized Beijing Last week, the Ministry of Justice brought charges against two Chinese researchers who were accused of smuggling a mushroom that can cripple the harvest of wheat and other grains in the United States.
The Trump administration has also urged China to do more police exports to the United States of Fentanyl and the forerunner chemicals in order to achieve a tariff of 20 percent in connection with Fentanyl. A 10 percent “universal” tariff is largely valid for countries, although the courts question its legitimacy.
The Trump government continues to focus on negotiations with more than a dozen other countries before a deadline on July 9, when higher tariffs come into force worldwide. As part of these negotiations, US officials have pressed Europe, Vietnam, Malaysia and other governments to limit their trade with China.
Chinese officials have tried to strengthen their trade relationships elsewhere, and seem to wait to negotiate the conditions of the Trump government with other governments. During his time in London, he should also meet his British colleagues for trade talks.
Keith Bradsher the reporting of Baotou, China and Eshe Nelson made from London. Amy Chang ChienPresent Joy Dong And Siyi Zhao Research contributed.