Beijing halted exports of essential minerals and magnets in response to tariffs imposed by the U.S.
U.S. Commerce Secretary Howard Lutnick announced the finalization of a trade understanding between the U.S. and China, initially brokered last month in Geneva, potentially indicating a de-escalation in the trade dispute. Lutnick told Bloomberg on Friday that the agreement includes China’s commitment to resume supplying rare-earth minerals, which are crucial to various industries.
Tensions between the world’s two largest economies heightened in April when U.S. President Donald Trump implemented widespread tariffs on over 90 countries, including China, citing trade imbalances. Beijing responded, leading to escalating tariff increases that reached 145% by the U.S. and 125% by China. Following discussions in Geneva last month, both countries agreed to suspend most new tariffs. However, since then, each has accused the other of violating the terms and impeding negotiations on issues like export controls.
Reportedly, the latest agreement mirrors terms discussed in previous trade talks, but its success hinges on both sides’ adherence, particularly China’s delivery of rare-earth materials.
“They’re going to deliver rare earths to us” and once they do that, “we’ll take down our countermeasures,” Lutnick informed Bloomberg, adding that the trade deal was signed two days prior, solidifying commitments made in earlier discussions.
The Geneva deal reportedly stalled due to China’s restrictions on critical mineral exports, prompting the Trump administration to respond with its own export controls, preventing shipments of semiconductor design software, aircraft, and other goods to China.
China’s export suspension of a wide array of critical minerals and magnets had disrupted global supply chains essential to automakers, aerospace companies, semiconductor manufacturers, and military contractors.
According to Reuters, a separate White House official stated that Washington had reached an agreement with Beijing regarding rare-earth shipments, focusing on “how we can implement expediting rare earths shipments to the US again.”
Reuters, citing an industry source, reported that China has been taking its dual-use restrictions on rare earths “very seriously” and has been vetting buyers to ensure that materials are not being diverted for U.S. military purposes. This has slowed the licensing process.
During an event at the White House on Thursday in support of the “big, beautiful bill,” Trump mentioned that the U.S. had signed a deal with China on Wednesday, without elaborating, and suggested that a separate agreement might be forthcoming that would “open up” India. He hinted that a “very big” deal with India was in development.
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