US and China Finalize Rare-Earth Trade Deal to Resume Shipments
In a significant development, the United States and China have reached an agreement to restart the supply of critical rare-earth minerals, following a long period of heightened trade tensions. The deal was first negotiated during talks in Geneva in April and has now been finalized. According to US Commerce Secretary Howard Lutnick, the agreement includes China’s commitment to resume the export of rare-earth materials, which are vital for various industries. He confirmed that the deal was signed two days ago and that it reinforces commitments from earlier negotiations. Lutnick suggested that once China delivers the rare earths, the US will dismantle its countermeasures.
The agreement aims to ease the growing trade conflict between the two nations, which had escalated significantly in April when President Trump imposed sweeping tariffs on over 90 countries, including China, citing trade imbalances. Beijing retaliated with its own tariff hikes, reaching 145% by the US and 125% by China. After initial talks in Geneva, both sides agreed to pause most new tariffs, but recent accusations of violating the terms have stalled negotiations on export controls. The success of this new agreement will depend on China’s follow-through in delivering rare-earth materials, which are crucial for global industries such as automakers, aerospace firms, and semiconductor manufacturers. The Chinese suspension of rare-earth exports had previously disrupted global supply chains, affecting sectors critical to the US economy.
China’s suspension of exports of a broad range of critical minerals and magnets had disrupted global supply chains vital to automakers, aerospace firms, semiconductor makers, and military contractors. A separate White House official cited by Reuters said that Washington had reached a rare-earth shipment agreement with Beijing focused on “how we can implement expediting rare earths shipments to the US again.” China has been taking its dual-use restrictions on rare earths “very seriously” and has been vetting buyers to ensure that materials are not diverted to US military uses, Reuters said, citing an industry source. This has slowed down the licensing process.
While addressing an event in support of the “big, beautiful bill” at the White House on Thursday, Trump said the US had signed a deal with China on Wednesday, without providing details, and suggested a separate agreement could be coming that would “open up” India. He hinted that a “very big” deal with India was in the works.
Overall, the deal reflects the complex nature of US-China trade relations and highlights the mutual economic dependencies between the two countries. While the agreement is a step toward resolving the tensions, its success will depend on both sides’ commitment to follow through on their commitments. The rare-earth minerals are not only essential for the technological industries but also have strategic implications, especially in the context of global supply chain security and military applications. As the situation unfolds, the impact on global markets and international trade dynamics will be closely watched by investors and policymakers worldwide.