"Samarium," "gadolinium," or "terbium" are not raw materials that make as many headlines as "oil," "natural gas," or "coal." And certainly, companies like Echodyne, American Photonics, or Synexxus do not have the same level of attraction as Microsoft, Apple, or Nvidia. However, it was these names that were the focus of yesterday's high-level meeting between the United States and China in London to try to mitigate their trade war.
Beijing's decision in April to create a licensing system for seven of the 17 elements of the periodic table that make up the group of so-called "rare earths" and to place 17 US companies and entities - all but one specializing in the production of ultra-sophisticated defense systems - marked a qualitative leap in the conflict between the two countries, which began in 2018 and has only worsened since then, with tones of "total war" since Donald Trump announced tariffs on the entire planet (with the exception of Russia, North Korea, Belarus, and some other dictatorships) on April 2.
The results of this dynamic were revealed yesterday, just before the meeting began. In May, Chinese exports to the US plummeted by 34.5%, while imports from that country fell by 18%, as a result of retaliatory measures launched by Beijing. However, China was able to increase its exports by 4.8%, thanks to increased sales in Asia, Europe, and Africa.
So the meeting was crucial. Donald Trump's top economic advisor, Kevin Hassett, had told the financial information specialized television network CNBC that "I think this will be a brief meeting, ending with a firm handshake." But at the close of this edition, the two delegations had been meeting for seven hours and no one knew how the talks were going. On the US side, there were Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and the Trade Representative - a kind of Secretary of State for Foreign Trade in the US - Jamieson Greener.
Lutnick's presence was particularly significant because he is a man of Trump's utmost confidence and his Department has jurisdiction over the export of technology, a key aspect of the agreement. The Chinese delegation was led by Vice Premier He Lifeng, Beijing's top economic official.
Both countries were once again choosing a neutral ground for the meeting, as was the case in Geneva in the first meeting held in May. Back then, the agreement focused on reducing tariffs. But in the British capital, the priority is to try to get both countries to stop strangling each other in the competition for critical minerals and advanced technologies. And that's where Synexxus and gadolinium come into play.
US officials had indicated that the Trump administration would ease restrictions on technology exports to China in exchange for more export licenses from Xi Jinping's administration. This, given the opacity of the Chinese Public Administration, is no small feat.
Last Friday, during a phone call between the leaders of the world's two largest economies, the Chinese president used a maritime analogy comparing the US and China to large ships steered by two captains firmly holding the helm to stay on course in the face of a great storm. His counterpart, Donald Trump, got the message.
The US president had long awaited that call with his Chinese counterpart, which came at a time when the fragile trade truce agreed upon a couple of weeks earlier was crumbling. The 90-minute conversation between the two leaders prevented a total breakdown. Afterward, Trump announced that negotiators from both sides would sit down face to face again.
Last month, after a two-day marathon of negotiations, they announced a truce by suspending most tariffs for 90 days. US tariffs on Chinese products, which Trump had raised to 145%, were reduced to 30%, while China's 125% tariffs were lowered to 10%.
The 20% difference corresponded to punitive tariffs, for now immovable, related to fentanyl. Washington accuses Beijing of not doing enough to stop the shipment of the chemical precursors needed to manufacture this synthetic drug that is causing so much devastation on American soil.