China and the United States announced that they have reached a trade agreement, including a 90-day suspension of tariffs and a mutual reduction of tariffs by 115%. Foreign media and experts pointed out that investors are expecting further easing of other export control restrictions, which may include China's rare earth controls.
Market observers believe that the temporary tariff reduction agreement reached by China and the United States is "better than expected", "more feasible", and even "ideal", and expect it to bring more relief to investors in the short term.
According to a report by Reuters on Monday (the 12th), with the trade truce reached between the U.S. and China on Monday, Beijing is expected to accelerate the approval process for export licenses to American customers. However, the possibility of completely lifting these restrictions is small.
In April, China added seven types of rare earth materials and related items to the control list in response to U.S. tariffs. This decision requires exporters to apply for permits before selling these items outside China. The recent truce may lead to an acceleration of the approval process by the Ministry of Commerce, theoretically taking 45 days, and may issue permits to American customers in the near future.
Morgan Stanley Asset Management's Chief Market Strategist for Asia-Pacific, Tai Hui, noted that the extent of this tariff cut exceeded expectations. He wrote in a report on Monday: This reflects both sides' recognition of the economic reality that tariffs will impact global economic growth, and negotiation is a better choice for the future. The 90-day period may not be enough for both sides to reach a detailed agreement, but it will continue to exert pressure on the negotiation process.
Tai Hui pointed out that investors are still waiting for further details about other terms of the agreement, such as whether China will relax its restrictions on rare earth exports.
Reuters noted that in this round of U.S.-China trade negotiations, China also promised to cancel non-tariff countermeasures against the U.S. implemented since April 2nd, although it remains unclear how some of these measures will be canceled. As part of the April countermeasures, China listed rare earths on the export control list, launched anti-dumping investigations against DuPont's Chinese business, and blacklisted some U.S. defense and technology companies.
China and the United States announced that they have reached a trade agreement, including a 90-day suspension of tariffs and a mutual reduction of tariffs by 115%. Foreign media pointed out that investors are expecting further easing of other export control restrictions. (AFP)
The wording of the agreement indicates that these companies will be removed from the list prohibiting trade and investment with China, and anti-dumping investigations will be postponed. The statement only mentions that anti-dumping measures implemented after April 2nd will be canceled, so it does not include more than a dozen companies blacklisted in March or the anti-dumping investigation against Google announced in February.
Regarding the issue of rare earths, as China's decision applies to all countries, it is unclear whether this will be considered a targeted countermeasure under this agreement. The original announcement from China's Ministry of Commerce did not mention the United States but required all exporters to obtain permits before exporting the seven types of rare earth materials.
Original article: https://www.toutiao.com/article/7503771799017013779/
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