U.S. Secretary of Commerce in Charge of Export Controls Joins Trade Talks
The United States and China will resume high-level trade talks in London, United Kingdom, on June 9 (local time). With Howard Lutnick, the U.S. Secretary of Commerce who oversees export control policy, newly joining the negotiations, both countries are expected to focus on export restrictions?a key concern for industry?rather than tariffs as the main agenda item.
According to Bloomberg News and the Wall Street Journal (WSJ) on June 8, the U.S. and China are likely to request the lifting of export control measures previously imposed by each side during the talks the following day.
Previously, China responded to U.S. tariff hikes by restricting exports of rare earth elements, while the United States recently limited exports to China of aircraft engines, semiconductor design software, certain chemicals, and nuclear power plant equipment. In addition, last month, the U.S. warned that using Huawei artificial intelligence (AI) chips anywhere in the world would be considered a violation of U.S. export controls. The focus of the trade war between the two countries is shifting from tariffs to export controls that block the mutual export of essential raw materials and technologies for industry.
In this context, the WSJ assessed that Secretary Lutnick's participation in the negotiations?he is the control tower for U.S. export control policy?signals a welcome sign for China. This is interpreted as an indication that President Trump is putting the relaxation of export controls on the negotiating table. Previously, Secretary Lutnick did not participate in the U.S. delegation during the U.S.-China trade talks held in Geneva on May 10-11, which were attended by Treasury Secretary Scott Besant and U.S. Trade Representative Jamison Grier.
Kevin Hassett, Chairman of the White House National Economic Council (NEC), said in a CBS News interview that day, "China's exports of critical minerals to the U.S. are happening at a faster pace than before, but not as fast as we thought we had agreed upon in Geneva." He expressed optimism about the outcome of the second high-level U.S.-China trade talks in London, stating, "We want rare earth elements, such as the magnets essential for cell phones and everything else, to flow in as they did before early April this year. We do not want any technical details to delay that inflow."
Previously, during the Geneva negotiations, the two countries agreed to mutually reduce tariffs by 115 percentage points and for China to eliminate certain non-tariff measures. In this regard, the United States claimed that China was violating the agreement by maintaining export controls on critical minerals and rare earth elements, which China had agreed to lift. When China halted exports of rare earth minerals and permanent magnets to the U.S., it triggered a state of emergency in the American automotive and electronics industries. In response, the leaders of both countries discussed the issue directly by phone on June 5 and agreed to hold high-level trade talks in London on June 9. On the U.S. side, Secretary Besant and Representative Grier will be joined by the newly added Secretary Lutnick, while on the Chinese side, Vice Premier He Lifeng of the State Council, Li Chenggang, China's chief international trade negotiator at the Ministry of Commerce, and Vice Minister Liao Min of the Ministry of Finance will participate.
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