Could faster export approvals benefit U.S. industry?
There are signs of movement in the ongoing trade dispute between the United States and China. According to media reports, the two countries have been engaged in talks since May and have now reached a preliminary framework agreement that could accelerate the export of rare earth elements. Bloomberg reports that the agreement may ease restrictions imposed in April on seven heavy rare earths, including terbium, a critical element used in magnets and high-tech applications.
Exports of terbium from China dropped to zero in May following the introduction of new export controls.
However, this decline was not due to an outright export ban but rather a new licensing regime introduced by China. Since April, rare earth materials covered by the rules require official export licenses, which can take up to 45 business days to process. The delays have already led to production disruptions in Western industries reliant on these materials.
While the licensing rules apply to all destination countries, sources suggest that the U.S. may soon benefit from expedited procedures. U.S. Commerce Secretary Howard Lutnick was quoted by Bloomberg as saying: “They will supply us with rare earths,” and once that happens, “we will roll back our countermeasures.” Those countermeasures include tariffs on aircraft components and chip-design software.
Still, a full resolution of the broader trade conflict remains distant. Tensions have been running high since the U.S. announced a new wave of punitive tariffs on Chinese goods on April 2. Although some of those duties were temporarily suspended, they are currently set to take effect on August 12.
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