China has said it will suspend or revoke trade countermeasures affecting the export of critical industrial materials such as rare earth metals and magnets, after the country reached a deal with the US to pause most punitive tariffs for 90 days, in an agreement that sent stocks surging around the world.
The suspension of restrictions on exports of rare earth metals and magnets will benefit industries ranging from automakers to aerospace and semiconductor manufacturers.
But the deal does not provide clarity on US de minimis exemption policies on imports from China, which have been a critical factor in the growth of Chinese e-commerce firms such as Shein and Temu.
‘Volatile’
Some industry analysts said they believed Chinese manufacturers would continue to prioritise European and UK markets due to the erratic state of trade affairs with the US.
Andrew Gossage, chief executive of Ultimate Products, which owns homeware and appliance brands selling China-manufactured products mainly to the UK and the EU, told Reuters Chinese manufacturers were “seeing European, UK markets as more rational, more reliable, less volatile”.
European companies that had been affected by the trade chaos saw their shares rise after the deal was announced earlier on Monday, with shares in shipping company Maersk jumping more than 12 percent before closing about 10 percent higher.
Maersk said in a statement it hoped the 90-day pause could “lay the foundation for the parties to also reach a permanent deal”.
The agreement, which followed a weekend of negotiations in Switzerland, will see US tariffs on mainland China and Hong Kong reduced from 145 percent to 30 percent, with Chinese duties on US goods lowered from 125 percent to 10 percent.
US Treasury Secretary Scott Bessent said the tariffs levied against one another by the US and China had created “the equivalent of an embargo, and neither side wants that”.
Effective ’embargo’
“The consensus from both delegations this weekend is neither side wants a decoupling,” Bessent added.
China’s vice premier He Lifeng said on Sunday the talks were “candid, in-depth and constructive” and had “achieved substantial progress and reached important consensus”.
Bessent said there were plans in place for meetings with the Chinese trade delegation over the next 90 days, which he said would focus on opening up China to American businesses.
The White House initially said it was levying tariffs on China and other countries to protect American manufacturing capacity against unfair trade practices.
The administration also cited the export of fentanyl precursors from China.
