In a significant stride toward de-escalating trade tensions, President Donald Trump announced a new trade deal with China that, if finalized, would see China providing rare earth elements and magnets upfront to the U.S. This agreement, which still needs the green light from both Trump and Chinese President Xi Jinping, also includes U.S. concessions, such as easing restrictions on Chinese students attending American universities.
Key Details of the Proposed Deal
After two days of intense negotiations in London, the framework of this deal emerged. President Trump highlighted the tariff structure on Truth Social, stating, “WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%.” He also underscored China’s commitment to deliver “full magnets and all necessary rare earths in advance.”
U.S. Commerce Secretary Howard Lutnick described the agreement as a “crucial first step” in addressing long-standing concerns over China’s dominant role in the global rare earths supply chain. China currently produces about 60% of the world’s raw rare earth output and processes nearly 90%, making its control a strategic vulnerability for the U.S., particularly as the global economy shifts towards renewable energy and electric vehicles.
Both Secretary Lutnick and Chinese Vice Commerce Minister Li Chenggang confirmed that a framework was reached to implement the consensus from earlier discussions, including a phone call between Trump and Xi Jinping on June 5th and talks held in Geneva. The next step is for both presidents to officially approve the agreement, paving the way for its implementation.