Trump’s trade negotiations with China put US at disadvantage

U.S. Commerce Secretary Howard Lutnick is immersed in trade talks with China in London this week, hoping for a resolution to conflicts over restrictions and tariffs concerning semiconductors and essential rare earth minerals. CEI trade policy expert Ryan Young points out that the current mess was self-inflicted in various ways:

“If President Trump hadn’t started raising tariffs in the first place, none of this would have happened. American businesses should not have to worry about being cut off from needed materials due to a whim-based trade war in Washington.

“Even if negotiations succeed in re-opening markets for rare earths and semiconductors, all that effort will get us to back where we already were a few months ago. Moreover, trade barriers will still likely be far higher than they were before Trump’s first term.

“There is also no reason for China to have such a commanding market share of earth minerals. Rare earths exist all over the world, including in the US. Yet the US has only one rare earth mine and no refineries, thanks to regulations, permits, and other self-imposed obstacles, like the conflict minerals provision of the Dodd-Frank Act. Regulatory reform is the solution to the rare earths problem, not yet more tariffs and negotiations.”