US-China Trade Truce Extended Amidst Ongoing Negotiations
The United States and China have reportedly agreed to extend their tariff truce by an additional 90 days, a move that signals a possibly stable period in their complex trading relationship. This extension, expected to have been finalized late Sunday, comes as the previous agreement was slated to expire on August 12th.
Ahead of these crucial talks, U.S. Treasury Secretary Steven Mnuchin expressed a desire to address China’s oil purchases from Russia and Iran. President donald Trump has previously indicated a willingness to impose 100% tariffs on nations that engage in such transactions. The potential imposition of such a levy on China, a significant buyer of these commodities, could reignite the trans-Pacific trade war and jeopardize the trade of rare-earth minerals.
Experts suggest that China’s leverage in rare-earth exports may diminish over time. As one analyst noted, repeated use of rare-earth export restrictions to achieve concessions from the U.S. could lead to increased frustration. Furthermore, even if China were to resume previous export levels, the global market would likely seek to diversify its supply chains, recognizing China’s capacity to limit these exports at will.
Secretary Mnuchin also intends to discuss China’s manufacturing “overcapacity” with his Chinese counterpart. The U.S. Treasury has previously criticized Beijing’s extensive subsidies for its manufacturing sector. This strategy, which prioritizes production and exports over domestic consumption, is seen as a contributing factor to china’s substantial trade surplus with the United States, a situation that President Trump has vocally opposed. Beijing has indicated it is taking steps to address these imbalances.