U.S. and China Advance Trade Deal With Focus on Rare Earth Exports
President Donald Trump announced on Thursday that a new trade understanding with China had been reached, marking a potential step forward in ongoing tariff negotiations. While the president initially referred to it as a signed agreement, White House officials later clarified that the development involved a new framework, particularly targeting rare earth minerals.
Rare earth elements are critical to the production of smartphones, defense systems, electric vehicles, and aircraft—making them a key issue in trade talks between the world’s two largest economies.
White House Clarifies Scope of Agreement
According to a senior official who spoke anonymously, the latest agreement outlines implementation plans for a deal originally struck in Geneva earlier this year. This framework centers on China’s willingness to resume rare earth exports to the United States, while the U.S. will gradually remove some of its trade countermeasures.
Commerce Secretary Howard Lutnick confirmed the rare earth component during an appearance on Bloomberg TV, stating that China “will deliver rare earths to us,” and the U.S. will “take down our countermeasures” in response.
China’s Ministry of Commerce also acknowledged progress, writing in a statement that it will review and approve qualified export applications for controlled items. In return, the U.S. has agreed to reduce restrictions on Chinese imports.
Tariff Deadlines Remain Unclear
The deal comes amid broader uncertainty surrounding tariffs. In April, President Trump announced sweeping tariffs on imports from nearly all countries, with some rates exceeding 40%. A 90-day pause brought them down to 10%, but that pause is set to expire on July 9.
The administration had set an August 12 deadline for a more permanent agreement with China, following a Geneva meeting that temporarily set tariffs at 30%.
So far, the U.K. is the only country with a finalized individual tariff deal, which was signed last week during the G7 summit. The White House now refers to July 9 as a “soft deadline,” and officials expect additional deals to follow over the summer.
Multiple Trade Deals Expected by Labor Day
Treasury Secretary Scott Bessent said Friday that the U.S. is in talks with 10 major trading partners and anticipates sealing several key deals by Labor Day. “If we can ink 10 or 12 of the important 18,” Bessent told Fox Business, “then I think we could have trade wrapped up by Labor Day.”
He added that ongoing discussions aim to stabilize trade flows and reduce global uncertainty caused by fluctuating tariffs. The goal is to reach bilateral agreements with a wide range of countries to replace the broader tariffs that have disrupted markets.
Tariffs Continue to Impact U.S. Consumers and Producers
Since the onset of the U.S.–China trade conflict, American consumers have faced rising prices on everyday goods such as clothing and electronics. At the same time, U.S. farmers have struggled with reduced exports to China, as higher tariffs have made American agricultural products less competitive.
The recent progress with China on rare earth exports could ease supply chain pressure, but broader economic impacts from the trade war remain unresolved as negotiations continue.
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