US Delays 50% Sanctions Rule for China’s Rare-Earth Reprieve
President Donald Trump’s administration has agreed to a yearlong delay of a sanctions framework that would have dramatically expanded the number of Chinese companies subject to US trade restrictions, part of a broader agreement that saw Beijing punt its latest escalation of rare-earth export controls.
China’s Ministry of Commerce said in a Thursday readout that Washington had agreed to put off implementation of its so-called 50% rule, announced in late September, for one year. The US measure seeks to prevent sanctioned companies — such as Huawei Technologies Co., China’s AI chip champion — from using affiliates to access restricted US goods.
China, meanwhile, will delay by 12 months an expansion of its own sweeping export controls on rare-earth minerals, which threatened to upend global operations for industries from autos to semiconductors. Beijing had sharply opposed the 50% rule and cited Washington’s actions as the trigger for its October measures, which targeted the whole world’s supply chains by asserting control over shipments in any country containing even trace amounts of Chinese rare-earths.
Securing a reprieve from China’s actions, set to take effect in December, was a key priority for American negotiators heading into talks in Kuala Lumpur. Washington’s decision to stand down on the 50% rule — despite Treasury Secretary Scott Bessent saying just days prior that the US had made “no changes” to export controls as part of the Malaysia talks — reflects the degree of leverage that Beijing’s supply-chain dominance gives Xi Jinping over the US and other nations.
Bessent confirmed the 50% rule delay in a Fox News appearance Thursday, saying that “we are going to be suspending that for a year in return for the suspension on the rare-earth licensing regime.”
Source : Bloomberg.com
