U.S. Trade Representative awkwardly smiles: It would be better not to discuss rare earths during the visit to China

Why has the rare earth issue become a sensitive topic avoided in US-China summit talks?

【Text / The Observer Network, Ruan Jiaqing】

U.S. President Trump was originally scheduled to visit China from late March to early April this year but postponed to mid-May due to the Iran situation.

According to reports from Reuters and Bloomberg on the 8th, U.S. Trade Representative Grier said Tuesday (the 7th) at an event hosted by the conservative think tank Hudson Institute in Washington that when discussing preparations for the China-U.S. meeting, the current economic and trade relationship between the U.S. and China is in a “stable” state, and Trump’s visit will aim to maintain this situation.

“Right now, I would describe the U.S.-China economic and trade relationship as stable,” he said. “I know this word is dull and you’ve heard me and others mention it many times before, but that’s the current reality. I believe no one is willing to face a different scenario at this moment.”

Grier’s so-called “stability” refers to the U.S. continuing to impose “high tariffs” on China while sourcing rare earth supplies from China.

He said, “We and China have entered a stable state, with the U.S. maintaining high tariffs on Chinese goods, mainly high-tech products and manufactured goods… We want to maintain this stability to ensure we can continue to obtain rare earths from China.”

Grier argued that the U.S. “does not seek large-scale confrontation or any similar conflict with China,” but needs to safeguard its national and economic security, which is also why the U.S. continues to implement tariffs to address trade deficits.

According to Grier, negotiations at the ministerial and working levels regarding rare earths are still progressing. He slightly raised an eyebrow and awkwardly smiled, saying, “It’s probably best not to discuss the rare earth issue at the summit. If it can be resolved at the ministerial and working levels, that would be ideal. We also hope to have the capacity to do so.”

“Of course, the President will continue to work to secure rare earth supplies for the U.S. as always,” Grier added, noting that the U.S. is “making significant progress” toward self-sufficiency in rare earths, but he did not elaborate further.

In mid-March, China and the U.S. held economic and trade consultations in Paris, France. According to Xinhua News Agency, both sides agreed to explore the establishment of a cooperation mechanism to promote bilateral trade and investment, continuing to play a good role in the China-U.S. economic and trade consultation mechanism.

Grier revealed during the event that the U.S. and China are pushing to establish a trade committee mechanism to maintain stable relations. He said this mechanism would clarify what kinds of trade can be sustainably conducted between the two countries without crossing the red line of national security.

“We are considering establishing such a mechanism to cooperate with China, to identify non-sensitive goods for trade, and to clarify the scale and flow of trade,” he said.

“This will help us better discuss more difficult issues,” he added.

However, Grier downplayed the possibility of establishing a dedicated bilateral investment agency. He said that while the two sides have discussed setting up an investment committee, it would only address specific investment-related issues, such as obstacles faced by companies investing in the U.S. or China, rather than broad policy topics.

“I think the nature of the investment committee is different from that of the trade committee. The trade committee will set very specific content regarding commodity trade,” he continued. “But in terms of investment, I think our relationship with China has not yet reached the stage of discussing investment projects, right?”

According to Bloomberg, during the Obama administration, the U.S. and China had a strategic and economic dialogue mechanism covering various bilateral relations, but Trump abolished it during his first term. Currently, investment-related matters are mainly handled by the U.S. Department of the Treasury.

Grier echoed Trump’s policy stance, emphasizing that the core goal of the current administration is to control the trade deficit, and that “it’s not appropriate to rush into bilateral investment issues.” He said last year, the U.S. trade deficit with China decreased by $130 billion, a 30% reduction, and that “we must ensure that national security remains advantageous in our relations with China.”

After the China-France Paris trade talks, China reiterated its consistent opposition to the U.S. imposing unilateral tariffs, urging the U.S. to fully cancel such measures and take necessary actions to firmly defend its legitimate rights and interests. China hopes that the U.S. and China will work together to implement the important consensus reached by the two heads of state, continuously expand the cooperation list, shrink the issues list, and promote healthy, stable, and sustainable development of China-U.S. economic and trade relations.

According to Hong Kong’s South China Morning Post, Grier said during a break that since “working group meetings are held regularly,” he does not need to go to China for summit preparations, and “a video conference will be held later.”

He added that during the WTO 14th Ministerial Conference held in Yaoundé, Cameroon last month, he had also met with Chinese representatives for preparations.

This article is an exclusive report by The Observer Network. Unauthorized reproduction is prohibited.