US, China reach deal to resume rare earth shipments amid trade talks

The United States and China have reached an agreement to expedite rare earth shipments to the US, a White House official announced on June 26, marking a potential step forward in efforts to resolve the ongoing trade dispute between the world’s two largest economies.

President Donald Trump said on June 25 that the US had signed a deal with China, though he provided few details. He also hinted at a separate forthcoming agreement that could "open up" India, Caliber.Az reports via Reuters.

The deal follows trade talks held in May in Geneva, during which China agreed to remove certain non-tariff countermeasures against the US from April 2. However, the process for lifting some of these measures remains unclear.

In response to US tariffs, China had previously suspended exports of key minerals and industrial magnets—materials vital to global supply chains in sectors such as automotive, aerospace, semiconductors, and defense.

"The administration and China agreed to an additional understanding for a framework to implement the Geneva agreement," a White House official stated on June 26. The official added that the understanding is "about how we can implement expediting rare earths shipments to the US again."

Another US administration official confirmed that the agreement was reached earlier this week.

US Commerce Secretary Howard Lutnick told Bloomberg: "They’re going to deliver rare earths to us" and once they do that "we'll take down our countermeasures."

While the agreement represents progress after months of trade-related uncertainty since Trump took office in January, officials acknowledge that a comprehensive trade resolution remains a work in progress.

China has reportedly been enforcing strict controls on rare earth exports, particularly to prevent materials from reaching the US military.

 “China has been taking its dual-use restrictions on rare earths 'very seriously' and has been vetting buyers to ensure that materials are not diverted to US military uses,” an industry source said. These measures have led to delays in the licensing process.

The Geneva agreement had previously stalled over China’s export curbs, prompting Washington to introduce new controls on the export of semiconductor software, aircraft, and other goods to China.

Earlier this month, Reuters reported that China had issued temporary export licenses to rare-earth suppliers serving the top three US automakers, amid signs of disruption to supply chains.

Later in June, Trump indicated that as part of a new agreement, China would resume supplying magnets and rare earth materials, while the US would in turn allow Chinese students to continue studying at American colleges and universities.

By Sabina Mammadli