The United States and China have reached a significant trade breakthrough, formalizing a deal that would allow China to export rare earth minerals to the US. This development comes after weeks of intense negotiations between the two countries, with rare earths becoming a key focus of trade frictions.
According to China’s Ministry of Commerce, “China will approve the export application of controlled items that meet the conditions in accordance with the law. The United States will cancel a series of restrictive measures taken against China accordingly.” This statement follows comments from US President Donald Trump and his Commerce Secretary Howard Lutnick, who confirmed that the two sides had reached a deal.
Key Terms of the Agreement
Under the agreement, China will expedite rare earth exports to the US, while the US will lift specific countermeasures imposed during the trade dispute. Commerce Secretary Howard Lutnick said, “They’re going to deliver rare earths to us, and we’ll take down our countermeasures.” This move is expected to ease tensions between the two countries and stabilize the supply chain for rare earth minerals.
China controls around 90% of global rare earth processing, according to the International Energy Agency. The recent agreement aims to restore shipments of these critical materials, which are essential for various industries, including:
- Electric Vehicles: Rare earths are used in the production of electric motors and batteries.
- Aerospace Systems: Rare earths are used in the manufacture of advanced materials and components.
- Semiconductors: Rare earths are used in the production of specialized components.
The US-China rare earth deal signals renewed cooperation on critical mineral flows amid a tense trade standoff. The agreement is expected to:
- Restore Supply Chain Stability: By ensuring a steady supply of rare earth minerals, the deal aims to alleviate concerns about supply chain disruptions.
- Ease Trade Tensions: The agreement marks a significant step towards easing trade tensions between the US and China.
While the agreement is a positive development, experts expect China’s dual-use export restrictions to still prohibit shipments to military suppliers, potentially leaving US defense contractors without access to such materials. Further negotiations are likely to focus on addressing these concerns and ensuring the smooth implementation of the agreement.