US and China strike deal on rare earth exports in bid to ease trade tensions

The United States and China have reached a breakthrough agreement to expedite rare earth mineral exports from China to the US, in a move aimed at de-escalating ongoing trade tensions between the world’s two largest economies.

The deal follows recent negotiations in London, and was confirmed by both Washington and Beijing. The Chinese Ministry of Commerce (MOFCOM) issued a statement affirming that it will approve export applications in accordance with legal procedures, while the US will begin lifting restrictions previously imposed on Chinese goods.

President Donald Trump briefly acknowledged the deal on Wednesday, without providing details, but hinted that further agreements, including one with India, could follow.

MOFCOM stated that the new agreement reflects a mutual understanding reached in Geneva trade talks, with China committing to expedite export approvals for rare earth shipments to the US. In return, the US will begin rolling back several restrictive measures.

The ministry also expressed hope that the US will continue to engage China in “constructive economic dialogue” as agreed during the two presidents’ phone call on June 5, reinforcing a commitment to reduce misunderstandings, enhance cooperation, and promote stable, sustainable economic relations.

An industry source revealed that China had increased scrutiny of buyers to prevent rare earths from being used for US military purposes, which had delayed the licensing process.

The rare earth dispute had become a sticking point in Geneva negotiations, prompting the Trump administration to retaliate by tightening export controls on semiconductor design software, aircraft, and other high-tech goods destined for China.

Earlier this month, Reuters reported that China issued temporary six-month export licences to supply rare earths to three major American automakers after initial restrictions disrupted supply chains. Ford Motor Company was forced to halt production of its Explorer SUV for one week in May due to shortages.

In late June, Trump also announced an agreement under which China would increase the supply of magnets and rare earth minerals, while the US would allow more Chinese students to enrol in American universities.

While the latest deal marks a positive step after months of uncertainty and economic disruption since Trump took office in January, analysts caution that a final and comprehensive trade agreement remains distant. The path forward will require continued negotiation and trust-building between the two global rivals.