Scott Kennedy,
The world breathed a sigh of relief on May 12 when, after negotiations in Geneva, the United States and China initially agreed to a 90-day pause in their trade war, halting sky-high reciprocal tariffs and other measures,
such as China’s latest export controls on rare earths. Markets reacted positively, and businesses geared up to use the pause to ramp up trade of goods in both directions, in case the cease-fire wasn’t extended.
The goodwill lasted all of one day. The deal quickly hit a snag over the status of the seven rare earths (samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium), but it’s not clear why—or how significant this is. Some may read this as another example of the tussle between the two powers,
with things likely to settle down after the recent meeting in London, in which China agreed to a six-month pause on any rare-earth limitations. U.S. President Donald Trump said the deal was “done,” while Chinese Vice Commerce Minister Li Chenggang said the two sides had, “in principle, reached a framework for implementing the consensus.”
Scott Kennedy is a senior advisor and trustee chair in Chinese business and economics at the Center for Strategic and International Studies.
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Scott Bessent and He Lifend stand next to each other while shaking hands and posing for a photo. Behind them are United States and Chinese flags.
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