U.S. and China Ink Trade Pact to Ease Tensions Over Rare Earths

New Agreement Aims to Stabilize Supply Chains and Reduce Trade Barriers
President Donald Trump boards Marine One on the South Lawn of the White House, Tuesday, June 24, 2025.
President Donald Trump boards Marine One on the South Lawn of the White House, Tuesday, June 24, 2025.Photo: The White House. Source: Wikimedia Commons. (Public Domain).
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Trade Deal Formalized

The United States and China have finalized a trade agreement aimed at resolving key disputes in their ongoing trade war, President Donald Trump announced.

The deal, signed recently, builds on prior negotiations in Geneva and London, focusing on facilitating access to critical rare earth minerals vital for U.S. industries.

We just signed with China the other day,” Trump stated at a White House event, though he offered no specifics.

The agreement follows a temporary truce in May that delayed significant tariff increases, allowing both nations to pursue a broader resolution.

Rare Earths and Supply Chains

A White House official clarified that the deal includes “an additional understanding for a framework to implement the Geneva agreement,” specifically addressing expedited shipments of rare earths to the U.S.

China’s Ministry of Commerce confirmed on Friday that it would approve export applications for controlled items in line with legal requirements, without directly referencing rare earths.

In response, the U.S. will lift certain restrictive measures against China.

This comes after China’s earlier suspension of critical mineral exports, which disrupted supply chains for U.S. automakers, aerospace, and tech sectors.

Recent reports indicate China granted temporary export licenses to suppliers for top U.S. automakers to mitigate these disruptions.

Broader Implications

The agreement marks a step toward de-escalating trade tensions between the world’s two largest economies, which have faced economic strain from tit-for-tat tariffs and export controls.

China’s factory profits dropped over 9% in May, while the U.S. economy contracted by 0.5% annually in Q1, partly due to import surges ahead of potential tariffs.

Commerce Secretary Howard Lutnick described the deal as “signed and sealed,” hinting at further negotiations.

Both sides expressed hope for mutual cooperation, with China’s Commerce Ministry stating, “It is hoped that the United States and China will meet each other halfway.”

The deal sets the stage for potential agreements with other nations, as U.S. officials signal more trade pacts on the horizon.

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