China Rolls Back Rare Earth Controls, Ends Chip Firm Probes

The US trade deficit narrowed sharply to $54.5 billion in January 2026, the lowest since October, following a revised $72.9 billion in December and compared to forecasts of a $66.6 billion gap. Exports jumped 5.5% to a record high of $302.1 billion led by sales of nonmonetary gold, other precious metals, computers, civilian aircraft and computer accessories while sales were down for pharmaceutical preparations. In contrast, imports declined 0.7% to $356.6 billion led by pharmaceutical preparations, trucks, buses, and special purpose vehicles, passenger cars and nonmonetary gold. On the other hand, imports rose for computers and telecommunications equipment. The largest trade gaps were recorded with Vietnam ($-19 billion vs $-17.6 billion in December), Taiwan ($-17.3 billion vs $-19.8 billion), Mexico ($-12.8 billion vs $-14.5 billion), and China ($-12.5 billion vs $-12.4 billion). The deficit with the EU narrowed sharply to $6.1 billion from $11.1 billion.

U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are expected to meet in Paris late next week to discuss potential business agreements ahead of a summit between U.S. President Donald Trump and his counterpart, Xi Jinping, Bloomberg News reported. Talks are likely to center on Chinese purchase commitments for Boeing aircraft and U.S. soybeans. Another key issue will be the future of tariffs imposed by Trump to curb fentanyl flows, after the U.S. Supreme Court struck down the duties. Trump is scheduled to arrive in Beijing at the end of March, with the Paris meeting seen as a precursor to broader negotiations at the leaders’ summit.

U.S. Trade Representative Jamieson Greer said Sunday that none of Washington’s trade partners have indicated plans to withdraw from existing agreements, despite a Supreme Court ruling that invalidated a broad portion of President Trump’s tariff program. On Friday, Trump introduced a temporary 10% tariff after the court struck down his earlier duties, which were imposed under an economic emergency law. He also ordered new investigations under alternative statutes that officials say could pave the way for fresh tariffs on multiple trading partners. A day later, he raised the temporary levy to 15%, the legal maximum. Separately, the EU has the tools to retaliate against the latest U.S. tariffs, France’s trade minister Nicolas Forissier told the Financial Times.