China trade thaw: Beijing pauses rare earth export curbs for 1 year after Xi-Trump talks, signals easing in tariff and tech tensions

China said on Thursday it will suspend for one year certain export restrictions, including those related to rare earth materials, that were announced earlier in October, signalling a temporary easing in trade tensions with the United States, AFP reported.



According to Beijing’s commerce ministry, the decision to “suspend the implementation of the relevant export control measures... for one year, and study and refine specific plans” followed trade discussions in Malaysia this week and came on the same day as talks between Chinese President Xi Jinping and US President Donald Trump in South Korea.




China, the world’s leading producer of rare earth minerals used in magnets critical for electric vehicles, electronics and defence industries, had on October 9 announced new controls on exports of rare-earth technologies--a sensitive sector that has long been a flashpoint in the economic rivalry between Beijing and Washington.



The new rules required exporters to seek approval for technologies linked to mining, smelting and processing of rare earths, as well as for “assembly, adjusting, maintenance, repair and upgrading of production lines,” the commerce ministry said.



Rare earths have remained a major sticking point in trade talks between the two sides, with Washington accusing Beijing of deliberately slowing down export licence approvals.



As part of the reciprocal measures, the United States agreed to suspend for one year its “Entity List” export restrictions on affiliates of blacklisted foreign companies where they hold at least a 50% stake, according to the ministry.



The US also agreed to reduce tariffs on certain Chinese goods, including lowering a fentanyl-related tax to 10%, while Beijing said it would adjust its countermeasures accordingly.



In another move, Washington will suspend for one year its Section 301 investigation into China’s shipbuilding industry, which had led both countries to impose port fees on each other’s vessels. China, in turn, will freeze its “countermeasures” on American ships for the same duration, AFP reported.



The Chinese commerce ministry added that both leaders had “reached consensus on cooperation in fentanyl trafficking control (and) expanding agricultural trade,” though no further details were provided.



Following the meeting, Trump told reporters that China would immediately begin purchasing “tremendous amounts” of US soybeans and other farm products.



Beijing also said the two sides would move to resolve issues surrounding the Chinese social media app TikTok, whose US operations Washington has sought to separate from its parent company ByteDance over national security concerns, AFP added.