Copyright Newsweek
Following their high-profile meeting on Thursday in South Korea, President Donald Trump said he had secured assurances from Chinese counterpart Xi Jinping that China would maintain its flow of rare earth exports to the United States for at least one year. The announcement came after weeks of escalating trade tensions and new export restrictions from Beijing, marking what could be a temporary reprieve in the ongoing trade war. Why It Matters Rare earth elements—a group of 17 metals essential to modern technology—are critical for both civilian and military applications. They are used in electric vehicle motors, wind turbines, radar systems, precision-guided missiles and semiconductors. China maintains a dominant position in this sector, controlling about 60 percent of global mining and roughly 90 percent of refining capacity. Analysts say Beijing’s decision earlier this month to announce new export curbs signaled its willingness to wield its dominance as leverage ahead of the leader-to-leader talks. Newsweek reached out to the Chinese Embassy in the U.S. by email with a request for comment. What To Know China first tightened controls on seven rare earth minerals in April after Trump imposed tariffs on Chinese imports of up to 145 percent. Following a round of mostly positive trade talks, Beijing agreed to partially relax those measures, though U.S. and other importers continued to report ongoing delays. As tit-for-tat measures continued and talks stalled, China’s Commerce Ministry on October 9 announced restrictions on five additional metals—ytterbium, europium, thulium, erbium, and lutetium—arguing that the materials were “directly or indirectly” finding their way into “military and other sensitive fields.” The ministry also said it would restrict the export of refining equipment and required foreign firms to apply for licenses to ship materials containing as little as 0.1 percent of the China-sourced rare earths minerals. Most of the curbs would have entered into effect in December. Alongside the minerals deal, Xi reportedly agreed to purchase additional American soybeans and to strengthen enforcement against the export of chemical precursors used to produce fentanyl—long a major sticking point in bilateral talks. In return, Trump agreed to trim the blanket tariff on Chinese goods by 10 percent, bringing it down to 47 percent. What People Are Saying Donald Trump wrote in a post on social media platform Truth Social following his meeting with Xi in Busan, South Korea: "China has agreed to continue the flow of Rare Earth, Critical Minerals, Magnets, etc., openly and freely." Henry Gao, professor at Singapore Management University’s Yong Pung How School of Law, wrote on X: “The U.S.-China deal is significant not because of the pause on proposed restrictions—which were leverage rather than for real—but because it paved the way to serious negotiations.” Robin Brooks, a senior economist and director of the Institute of International Finance, wrote in an X post: “There’ll be the usual chorus of voices that China has the upper hand vis-à-vis the U.S. Nonsense. The U.S. tariffs are a massive deflationary shock for China.” What Happens Next The deal appears to give Washington at least a one-year window, during which it is expected to continue its push for rare earth partnerships. During Trump's stop in Japan earlier this week, he and Prime Minister Sanae Takaichi signed a memorandum of understanding pledging to mobilize private investment to strengthen and diversify rare earth supply chains.
