## US-China Trade Talks Show Promise as Boeing Deal and Rare Earth Exports Advance
Negotiations between the United States and China are gaining momentum, with potential breakthroughs on multiple fronts, including a significant aircraft sale and increased trade in critical materials. Boeing is reportedly nearing a deal to sell up to 500 airplanes to China, with both nations currently finalizing specifics regarding jet models, quantities, and delivery timelines, as detailed in a recent Bloomberg report. This potential agreement highlights the importance of aircraft in the broader context of a possible U.S.-China trade agreement.
This progress coincides with a substantial recovery in China’s exports of rare-earth magnets. According to recent government data, shipments have returned to pre-curtailment levels seen before export restrictions were implemented in April. Exports to the U.S. increased dramatically, surging over sevenfold – a 660% rise – in June compared to the previous month, and continued to climb with a 76% increase in July.China’s dominance in the rare-earth magnet industry is considerable, controlling approximately 90% of global production and a similar share of the refining process for the necessary minerals.This position grants Beijing significant leverage in trade discussions with Washington,given the U.S.manufacturing sector’s heavy reliance on these magnets, particularly in the automotive, electronics, and renewable energy industries.
Henry Wang, founder and president of the Beijing-based Center for China & Globalization, and a former counselor to China’s state council, believes recent statements from former President Trump indicate a strong desire to foster trade cooperation and finalize an agreement. “He’s bluffing,” Wang stated, adding, ”He always talks big on tariffs or potential punishment, but we shouldn’t get caught up in the rhetoric.” Wang emphasized that the true measure of progress will be the implementation of any agreed-upon terms by both sides.
In June, the two countries established a trade framework that included easing restrictions on Chinese rare-earth exports and a partial rollback of U.S. technology export controls to China. Furthermore, both nations have agreed to reduce tariffs on each other’s goods, bringing them down to approximately 55% and 32% respectively. Though, this temporary truce is scheduled to expire in mid-November.
China’s embassy in the U.S. has not yet responded to requests for comment from CNBC.
Adding to the momentum, Li Chenggang, a senior Chinese trade negotiator, is expected to travel to Washington this week for meetings with U.S.Trade Representative Jamieson Greer and senior Treasury officials,according to a report in the Wall Street Journal published Tuesday.
Alfredo Montufar-Helu, managing director at advisory firm GreenPoint, suggests the continuation of the trade truce beyond November will depend on sustained dialog. He believes Li’s upcoming meetings could establish a foundation for more comprehensive negotiations and lasting resolutions to ease existing tensions.
