Bessent: China Agrees to Increase Rare Earth Exports to the US/ Newslookls/ WASHINGTON/ J. Mansour/ Morning Edition/ The U.S. and China have signed a trade agreement easing rare earth mineral exports crucial for American industries. Treasury Secretary Scott Bessent confirmed the deal, citing de-escalation in trade tensions. China will speed permit reviews for exports as the U.S. lowers tariffs.
China Rare Earth Deal + Quick Looks
- Rare earth exports freed up: US industries gain vital materials.
- Trade tensions cool: Agreement marks de-escalation in disputes.
- Permit delays eased: China to review export applications faster.
- Tariffs partially rolled back: New talks pave the way for more deals.
- Fentanyl also addressed: China tightens controls on precursor chemicals.
Bessent: China Agrees to Increase Rare Earth Exports to the US
Deep Look
US, CHINA STRIKE DEAL TO BOOST RARE EARTH EXPORTS, EASE TRADE TENSIONS
The United States and China have finalized a trade deal that will accelerate the flow of rare earth minerals and magnets essential for U.S. manufacturing, semiconductors, and defense industries, U.S. Treasury Secretary Scott Bessent confirmed on Friday.
Speaking on Fox Business Network’s “Mornings with Maria,” Bessent said the deal emerged from a recent flurry of high-level negotiations and a phone call between President Donald Trump and Chinese President Xi Jinping.
“They formed the core of a lot of our industrial base. They were not flowing as fast as previously agreed,” Bessent said of the rare earth shipments. “Part of the agreement was tariffs coming down and rare earth magnets starting to flow back to the U.S.”
A CRITICAL SUPPLY CHAIN ISSUE
Rare earth elements and specialized magnets are crucial components for everything from electric vehicles and wind turbines to smartphones, robots, and military hardware. China dominates global production of these minerals, giving it significant leverage in trade disputes.
Tensions had risen sharply after the Trump administration imposed steep tariffs on Chinese goods. Beijing retaliated by tightening its export policies for rare earths, introducing a new permitting requirement in April for seven rare earth elements, creating delays of up to 45 days. The permit system threatened to choke supplies and sparked fears of disruptions in global supply chains.
China’s Commerce Ministry confirmed Friday that both sides had “further confirmed the details of the framework” for easing rare earth exports. However, Beijing stopped short of fully lifting its permitting system, instead pledging flexibility in how fast it processes approvals.
“China will, in accordance with the law, review and approve eligible export applications for controlled items,” the ministry said. “In turn, the United States will lift a series of restrictive measures it had imposed on China.”
Sun Yun, director of the China program at the Washington-based Stimson Center, noted that Beijing’s policy is intentionally fluid.
“If all goes well, permit happens. If things go in a wrong direction, like U.S. arms sales to Taiwan, permits gone with wind,” she said.
FENTANYL, TECH, AND TARIFFS STILL IN FOCUS
While the new agreement clears a path for rare earths, other trade tensions remain unresolved. The U.S. still has tariffs in place on products tied to issues like fentanyl, aluminum, and steel. China recently announced additional steps to curb the flow of fentanyl precursors, designating two more chemicals for tighter production and export controls after Trump demanded stronger action.
In previous negotiations, the U.S. agreed to pause some efforts to restrict visas for Chinese students and temporarily halt sales of critical technologies, including components for jet engines and advanced semiconductors.
Commerce Secretary Howard Lutnick said the rare earth agreement was signed earlier this week, cementing months of discussions that began in Geneva in May and continued in London.
“We’re going to have deal after deal after deal,” Lutnick said, signaling Trump’s intention to continue negotiating additional trade pacts with other nations, including India.
IMPACT ON ECONOMIES
The U.S. economy has already felt the weight of the trade conflict, contracting at a 0.5% annual pace in the first quarter of 2025, as businesses rushed to import goods ahead of potential tariff hikes. Meanwhile, China’s factory profits plunged over 9% in May compared to a year earlier, with automakers particularly hard hit.
The recent agreement represents a significant de-escalation in what had been a deepening trade war between the world’s two largest economies, but both sides are moving cautiously. China’s retaining of permit controls suggests it intends to keep rare earth exports as a strategic lever, even as it signals willingness to cooperate.
While many hurdles remain, the deal has offered some relief to industries on both sides of the Pacific that depend on these critical minerals.
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