Key Takeaways
- China suspends latest rare earth export controls for one year
- US agrees to cut tariffs and ease export restrictions
- Both sides maintain earlier trade measures while new deal takes effect
- China to resume purchases of US soybeans and agricultural products
China has suspended its newest rare earth export controls in a significant trade breakthrough with the United States. In return, Washington will reduce tariffs and relax several export restrictions, according to the Chinese Commerce Ministry.
Agreement Details
The deal emerged after direct talks between Chinese President Xi Jinping and US President Donald Trump in South Korea, supplemented by economic delegation discussions in Kuala Lumpur.
“China will suspend the implementation of relevant export control measures announced on October 9 for one year, and will study and refine specific plans,” the ministry’s statement confirmed.
Background of Trade Tensions
Beijing’s rare earth restrictions targeted minerals with dual military applications, responding to US semiconductor and chipmaking equipment controls that began in late 2022. These tensions peaked when the Dutch government seized Chinese-owned chipmaker NeXperia in September under US pressure.
China maintains global dominance in rare earth extraction and processing – minerals essential for everything from smartphones to advanced weaponry.
US Concessions
Washington agreed to suspend its rule expanding export restrictions to businesses at least 50% owned by entities on its “entity list.” The US will also drop investigations into China’s maritime, logistics, and shipbuilding sectors while reducing fentanyl-related and reciprocal tariffs.
Agricultural Trade Resumes
President Trump described the meeting as “great” and confirmed China would restart purchases of US soybeans and other farm products halted during recent trade disputes.
The agreement leaves previous trade restrictions unchanged while establishing this new temporary framework.
