According to the White House, Beijing will start lifting an export prohibition on automotive computer chips that are essential to the global production of automobiles as part of a trade agreement between the US and China.
Following a meeting between Xi Jinping and Donald Trump in South Korea, the White House verified the terms of the agreement in a new fact sheet, according to a BBC report.
The export of automobile computer chips was one of the problems covered by the agreement. There had been worries that a shortage of chips from Nexperia, a company with production facilities in China, may lead to problems with the worldwide supply chain.
Despite having its headquarters in the Netherlands, Nexperia is a Chinese-owned business. Approximately 70% of Nexeria chips manufactured in Europe are shipped to China for completion and subsequent export to other nations.
Treasury Secretary Scott Bessent told CNN on Sunday after the fact sheet was made public: “We don’t want to decouple from China…” However, they have shown to be an untrustworthy partner.
China will “take appropriate measures to ensure the resumption of trade from Nexperia’s facilities in China, allowing production of critical legacy chips to flow to the rest of the world,” according to the fact sheet.
It comes after Beijing stated on Saturday that it was thinking of exempting certain companies from the prohibition.
Companies including Volkswagen and Volvo Cars warned last month that a scarcity of chips might force temporary production shutdowns, and Jaguar Land Rover claimed the deficit threatened their company’s operations.
Additionally, agreements had been established between the US and China regarding the supply of rare earth minerals, US soybean exports, and the materials needed to make the narcotic fentanyl. After Trump imposed tariffs on China after taking office this year, which sparked rounds of retaliatory tariffs and uncertainty for international business, the agreement defuses a trade war between the two biggest economies in the world.
A large portion of the information in Saturday’s fact sheet was made public by Trump and senior officials after the two leaders’ meeting. Beijing claimed to have struck a compromise to resolve “major trade issues,” but it did not immediately provide details of the agreement. Trump had called the discussions, which took place in South Korea, “amazing.”
SOURCE: DAWN NEWS
