The United States and China have reached an agreement to expedite shipments of rare earth minerals into America, in what appears to be a significant step towards easing the long-running trade war between the world’s two largest economies.
Speaking on Thursday, President Donald Trump announced that the deal had been signed the previous day, although he provided few details. He also hinted at a forthcoming agreement that would “open up” trade relations with India.
China confirmed the details of the agreement on Friday and reiterated its commitment to approving export permits for controlled items.
The breakthrough follows trade talks held in Geneva in May, during which China pledged to remove non-tariff countermeasures imposed since 2 April. However, uncertainty remains over how Beijing will reverse some of those retaliatory measures.
In response to new US tariffs, China had suspended the export of a wide range of critical minerals and magnetic materials, an action that sent shockwaves through global supply chains, particularly in sectors such as automotive, aerospace, semiconductors, and defence.
A White House official confirmed that the new understanding provides a framework for implementing the Geneva agreement, specifically aimed at resuming rare-earth shipments to the US. Another official added that the agreement was finalised earlier this week.
China, a crucial supplier for the US
China, which maintains a near-monopoly on rare earths, a dominance built during the 1990s and 2000s, has long been a crucial supplier for the US. Some of these minerals are essential components in American military equipment, exposing a strategic vulnerability that has become a key battleground in the trade dispute.
US Commerce Secretary Howard Lutnick told Bloomberg, “They’re going to deliver rare earths to us,” adding that once the shipments resume, “we’ll take down our countermeasures.”
Lutnick also suggested that similar deals were in the pipeline: “We’re going to do top 10 deals, put them in the right category, and then these other countries will fit behind.”
While the agreement marks progress after months of economic tension since Trump’s inauguration in January, it highlights the complexity and fragility of reaching a comprehensive trade settlement.
Beijing has reportedly intensified its oversight of rare earth exports. According to industry sources, Chinese authorities are vetting buyers rigorously to ensure that materials are not diverted for US military use, which has slowed the licensing process.
