US signals rare earths impasse is over. China is less forthcoming

By Lisa Visentin

June 27, 2025 — 7.54pm

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Singapore: China and the United States confirmed on Friday they had signed off on a trade agreement struck earlier this month, with the White House heralding the deal as breaking an impasse over rare earths exports.

However, China was more circumspect, saying it would approve the export of “controlled items”, but stopping short of confirming this included shipments of rare earths and magnets.

Beijing had suspended rare earth exports as part of its trade dispute with the US, triggering supply chain shortages. China has a monopoly on the production of rare earths, which are critical for the manufacturing of many products, including electric vehicles, wind turbines and defence technology.

China’s Xi Jinping and America’s Donald Trump.

In a statement on Friday, China’s Foreign Ministry said it had confirmed the details of a trade framework struck with US negotiators at crisis talks in London earlier this month.

“China will approve the export applications of controlled items that meet the conditions in accordance with the law. The United States will cancel a series of restrictive measures taken against China accordingly,” the statement said.

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“It is hoped that the United States and China will meet each other halfway.”

When asked at a daily press conference whether this included expediting rare earth exports, Chinese Foreign Ministry spokesman Guo Jiakun provided no further detail.

Earlier, 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”.

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The deal, Lutnick said, had been agreed to two days earlier, a timeline that US President Donald Trump also outlined.

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“We just signed with China the other day,” Trump said late on Thursday, local time.

Neither side provided further details on precisely what had been struck as part of the agreement.

A trade war between Beijing and Washington broke out after Trump’s April 2 tariff blitz, which saw both sides hit each other’s imports with ratcheting duties and other restrictive measures, in effect leading to a trade embargo between the world’s two biggest economies.

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US and Chinese negotiators initially brokered a truce at talks in Geneva in May, which rolled back the triple-digit tariffs for 90 days. But that deal began to waver when the US accused China of strangling the supply of rare earths and magnets, and Washington retaliated with new curbs on chip design software, jet engine parts, and student visa restrictions, as well as export controls on ethane shipments.

Over two days of crisis talks in London this month, negotiators emerged with an agreement to return to the trade truce they had reached in Geneva.

Trump heralded that outcome as a victory, but many analysts noted it appeared only to wind back the recent escalation.

There has been no further breakthrough on the key issues that were the rationale for the trade war in the first place, including China’s massive trade surplus with the US or its role as a chemical manufacturer in the fentanyl crisis.