U.S. and China reached a trade understanding in Geneva last month, U.S. Commerce Secretary Howard Lutnick said, adding that the White House is about to reach a deal with 10 major trading partners.
Lutnick Rare Earth Everything from wind turbines to jets.
“They will pass on rare earths to us,” Lutnick told Bloomberg News in an interview. “We will withdraw our countermeasures.”
A White House official said the United States and China agreed to implement the terms of the Geneva agreement. A spokesman for the Chinese embassy in Washington declined to comment, while China’s foreign ministry in Beijing did not immediately respond to a request for comment on Friday.
The news’s offshore yuan has barely changed, and China’s equity futures have not yet opened. Futures on the S&P 500 are stable.
The China agreement sets out provisions in this year’s trade talks between Beijing and Washington, a milestone in which both sides accused each other of violating the terms of the previous handshake agreement. However, it still depends on future actions of both countries, including China’s export of rare earth materials.
Lutnick told Bloomberg Television that President Donald Trump is also preparing to complete a trade deal by the July 9 deadline in the next two weeks to restore higher tariffs he stopped in April.
“We’re going to sign the first 10 deals, put them in the right category and then put other countries in the right category,” he said.
Lutnick has not specified which country will be part of the first wave of trade agreements, although Trump suggested earlier Thursday that the U.S. would soon reach a deal with India.
The president also said that if an agreement is not reached in time, he will eventually send a “letter” to the countries that decide on the terms of the trade. Lutnik added that on July 9, countries will be classified as “suitable buckets.” Trump can also extend the deadline to allow more conversations.
“Those who have reached the deal will make the deal, and everyone else who is negotiating with us, they will get a response from us, and then they will go into the program,” Lutnik said. “If people want to come back and negotiate further, they are entitled to it, but the tariff rate will be determined and we will continue.”
The president announced the so-called countdown rate (up to 50%) on April 2, but later paused most of that time for 90 days to allow negotiations.
It is not clear how comprehensive these trade deals will be. Trade agreements usually take years (rather than months) to negotiate. The earlier agreement with the UK still has no major issues, including discounts on some imported metals.
The China Agreement described by Lutnick is far from a comprehensive trade agreement that addresses difficult issues regarding fentanyl trafficking and U.S. exporters entering the Chinese market.
After initial negotiations in Geneva, the tariffs imposed by the two countries were lowered, and the United States and China alleged that they violated their agreement. After talks in London this month, negotiators from the United States and China announced that they had learned about it and were approved by Trump and Chinese President Xi Jinping.
Lutnick said that under the agreement signed two days ago, the “countermeasures” implemented before the London talks will be cancelled, but only rare earth materials will begin to flow from China. These U.S. measures include export curbs on materials, such as ethane used to make plastics, chip software and jet engines.
The deal came with restrictions on moving in the U.S., and earlier this week, the Commerce Department told energy companies that they could load oil and gas onto tankers and ship it to China, but would not unload it there without authorization.
It used to be Bloomberg Report American companies relying on these Chinese minerals are still awaiting approval from Beijing.
