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Finalization of US-China Trade Agreement Announced
In a recent interview with Bloomberg, Commerce Secretary Howard Lutnick disclosed that the United States has successfully completed and finalized a trade agreement with China. His remarks followed President Trump’s early announcement regarding the deal. According to Lutnick, China is set to provide rare earth metals to the U. S.in exchange for the removal of certain “countermeasures”currently imposed by America. It remains uncertain if semiconductors will also be included in these negotiations, especially considering the complications they present for China’s trade discussions.
Details from Lutnick on the Signing Process
Lutnick elaborated on the signing process, recalling, “The China deal, we inked the deal…we had a trip to Geneva that was slow played. After our discussions in London, that deal was finally signed and sealed two days ago.”The Secretary indicated that an arrangement with India might also be on the horizon but noted that such agreements require approval from both the Indian Prime Minister and Parliament. He mentioned, “The President likes to finalize these deals himself. He will make calls and add the finishing touches.”
Potential Changes to Countermeasures and Tariffs
Bloomberg further quoted Lutnick stating, “They’re [China] going to deliver rare earths to us, ”suggesting that once these shipments are executed, the U. S.would consider scaling back its countermeasures. However, it remains unclear whether the countermeasures Lutnick referenced could include restrictions on the sale of advanced semiconductors to China or merely the tariffs imposed during Trump’s administration.
Understanding Between US and China Regarding Rare Earth Supply
In a separate report, Reuters noted that the White House confirmed a mutual understanding has been reached between the U. S.and China about reinstating shipments of rare earth minerals. The discussion focused on ways for China to accelerate its shipments due to prior suspensions that jeopardized U. S.supply chains in key sectors such as automotive, defense, and consumer electronics. Following the announcement, shares of U. S.rare earth firms like MP Materials experienced a 2.6% drop in pre-market trading after an impressive 73% increase in June.
Implications for Advanced AI Chips Market
In comparison to China’s dominance in rare earth minerals, the United States holds a significant share in the advanced AI chips sector, particularly through companies like NVIDIA and AMD. These firms are pivotal in designing AI chips, which enables the U. S.to restrict sales to nations perceived as threats to national security. The extent to which AI GPUs and other chips are incorporated into the agreement remains ambiguous; NVIDIA’s stock price has remained steady, whereas AMD saw a modest 1% gain in pre-market trading, continuing its growth of 30% in August due to potential business expansions into China.
For more insights and updates on this evolving situation, please refer to the original article here.
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