US and China Trade Agreement: 5 Things You Need To Know

The agreement aims to resume critical mineral shipments to the U.S., easing supply chain pressure as both countries seek to de-escalate trade tensions.

1: Rare Earth Pact Signals Progress in Trade War

The U.S. and China have reached a new agreement to accelerate rare earth shipments, signaling progress in easing trade tensions between the two global economic giants. The rare earth pact comes as both countries work to defuse a trade war that has disrupted key industries, from automotive to aerospace.

2: Geneva Talks Laid the Groundwork

The deal follows a commitment made during trade negotiations in Geneva last month, where China agreed to remove non-tariff barriers it had imposed since April. A White House official described the agreement as an “additional understanding” to implement the Geneva framework and expedite rare earth exports.

3: Trump and Lutnick Highlight Agreement

President Donald Trump mentioned the deal earlier this week and hinted at a possible separate arrangement with India. U.S. Commerce Secretary Howard Lutnick said: “They’re going to deliver rare earths to us. Once they do that, we’ll take down our countermeasures.”

4: Export Licenses Still a Bottleneck

Despite the breakthrough, challenges remain. China has been slow to approve export licenses, citing national security concerns. Industry sources say these dual-use restrictions are being strictly enforced, which is delaying shipments.

5: Temporary Relief for U.S. Automakers

Recently, China granted temporary export permissions to key U.S. automakers. This move suggests a cautious easing of restrictions, though broader policy hurdles persist.

Summary: A Long Road to a Final Deal

While this understanding marks progress, a comprehensive trade agreement remains out of reach. China’s embassy has not yet responded, and tensions over strategic goods like semiconductors and aircraft components continue to loom large.