US and China Sign New Trade Deal Framework on Rare Earth Minerals

Executive Summary

On June 27, 2025, President Donald Trump confirmed that the United States and China have signed a new trade deal framework, marking a significant truce following months of escalating tensions. The agreement focuses on expediting shipments of rare earth minerals, easing export controls, and rolling back some tariffs. This development is crucial given the strategic importance of rare earth elements for high-tech industries and comes after secretive negotiations in London. The deal signals a de-escalation in the ongoing US-China trade conflict, with both sides making concessions to stabilize critical supply chains and global markets.[1]

Latest Development

On June 27, 2025, President Donald Trump announced at the White House that the US and China had signed a new trade agreement. This was confirmed by China’s Ministry of Commerce, which detailed that the framework includes provisions for accelerating the export of rare earth minerals to the US and rolling back a series of restrictive measures. The deal followed secret talks in London after initial negotiations in Geneva in early May. China agreed to expedite export permits for rare earth elements, while the US promised to cancel certain trade restrictions against China.[1]

Recent Developments

• Early May 2025: US and China postponed planned tariff hikes after talks in Geneva, averting an imminent trade freeze.[1]
• June 5, 2025: Presidents Trump and Xi Jinping spoke by phone, agreeing in principle to implement a consensus on trade and export controls.[4]
• Mid-June 2025: China accelerated export license approvals for rare earth shipments, responding to US pressure and signaling willingness to ease restrictions.[1]
• June 27, 2025: The new US-China trade deal was officially confirmed by both countries, focusing on rare earth flows, rollback of select tariffs, and moderation of export controls.[1][4]

Key Impact & Analysis

This agreement marks a major de-escalation in US-China trade tensions, particularly in the area of strategic minerals vital to advanced manufacturing. For US industries, especially automakers and tech firms, the resumption of reliable access to rare earths alleviates immediate supply chain concerns and reduces the risk of production disruptions.[3] The easing of export controls is expected to stabilize prices and provide market certainty. However, the persistence of high tariffs—reportedly remaining at around 55% for US imports from China, with some reductions—means that broader trade frictions are not fully resolved.[4][5]

For China, the deal preserves its position as a critical supplier while demonstrating flexibility amid global pressure. Both governments are using the agreement to manage domestic and international expectations, with the US pausing some technology and academic restrictions, and China ensuring continued rare earth flows. Nevertheless, analysts note that reliance on Chinese minerals remains a vulnerability for the US, and efforts to diversify supply chains are likely to continue.[3]

Looking Forward

Immediate next steps include the implementation of the new export approval processes and monitoring compliance with the agreed tariff adjustments. Upcoming policy statements from both governments are expected to clarify the details of the framework. Markets and stakeholders will watch for any disruptions or backsliding, as well as signals on further cooperation in technology and trade. The truce may be temporary, given the underlying strategic rivalry; long-term solutions will require the US and its allies to develop alternative rare earth supply chains to reduce dependence on China.[3]

Sources

1. https://www.euronews.com/business/2025/06/27/beijing-confirms-that-it-has-signed-a-trade-agreement-with-the-us
2. https://www.deccanherald.com/world/us-china-reach-deal-to-expedite-rare-earth-exports-3604869
3. https://www.csis.org/analysis/trump-strikes-deal-restore-rare-earths-access
4. https://www.china-briefing.com/news/us-china-relations-in-the-trump-2-0-implications/
5. https://en.wikipedia.org/wiki/Tariffs_in_the_second_Trump_administration