Agreement struck in Geneva centered on Beijing’s promise to speed critical mineral export licenses.
A trade truce between the U.S. and China is at risk of falling apart, as China’s slow-walking on rare-earth exports fuels U.S. recriminations that China is reneging on the deal.
Getting the pact together in Geneva earlier this month hinged on Beijing’s concession on the critical minerals, according to people familiar with the matter.
The people say the U.S. trade negotiators presented their Chinese counterpart, Vice Premier He Lifeng, with a demand that Beijing resume rare-earth exports.
He agreed to the demand in the final hours of marathon discussions with Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer, the people said.
In the resulting deal, both sides suspended most of the tariffs they had imposed on each other drawing cheers from global investors and businesses.
Since Geneva, however, Beijing has continued to slow-walk approvals for export licenses for rare earths and other elements needed to make cars, chips and other products.
On Friday, President Trump, along with his trade representative, called out Beijing for not fulfilling its commitments.
China, perhaps not surprisingly to some,
HAS TOTALLY VIOLATED ITS AGREEMENT WITH US,” Trump wrote on his social-media platform Truth Social.
Shortly afterward, Greer said China is “slow-rolling” its compliance with the agreement, mentioning rare-earth minerals as a sticking point.
For He, Chinese leader Xi Jinping’s economic gatekeeper, the willingness to comply with China’s rare-earth pledges faltered after the U.S. Commerce Department on May 12 issued a warning against the use of Huawei Technologies’s Ascend artificial-intelligence chips “anywhere in the world,” the people said.
Beijing viewed the warning as renewed U.S. aggression, and complained about it to Washington.
Trump officials then told He’s team that the Ascend guidance was a restatement of U.S. policy, the people said, and that China needs to do what it had agreed to.
Such messages have so far failed to sway He and Xi.
Beijing has kept on stonewalling approvals of such licenses.
The account, previously undisclosed, explains why the Geneva accord is now teetering on collapse.
The U.S. and China are moving to fight an economic warfare on widening fronts, with both sides seeking to gain leverage in new, nontariff ways.
The Trump administration’s remarks Friday came as many U.S. companies, in particular automakers, have complained to the administration that Beijing has been slow to approve export licenses for rare-earth minerals, which are crucial in multiple components of modern cars.
If China doesn’t speed up those approvals, companies have warned the White House, auto plants may have to idle in pandemic-style stoppages, according to a person with knowledge of the communications.
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