Trump and Xi Jinping reach a one-year rare earths supply deal; US cuts China tariffs by 10%

US President Donald Trump announced that he signed a one-year trade agreement with Chinese President Xi Jinping on the supply of critical rare earth minerals. The agreement, announced after the first face-to-face meeting in six years at the Asia-Pacific Economic Cooperation (APEC) summit in Busan, South Korea, aims to ensure the continuous flow of rare earth materials necessary for the global technology and manufacturing industries.

The United States also announced it would reduce tariffs on Chinese imports by 10 percentage points from 57 percent to 47 percent, signaling a step toward easing trade tensions. This tariff reduction is part of a broader effort to stabilize economic relations and is expected to be re-evaluated annually.

Speaking to reporters aboard Air Force One after the summit, Trump called the meeting “astonishing” and rated it a “12 out of 10” on a scale where 10 represents the best outcome. He emphasized that the rare earths agreement was an important aspect agreed for this year, with provisions for annual renegotiation.
Additionally, the United States will reduce fentanyl-related tariffs against China from 20 percent to 10 percent as part of a broader trade cooperation framework. The two leaders further eased long-running tensions by reaching consensus on export controls and several other critical trade issues, including China’s large purchases of U.S. soybeans, Trump said.

“All the rare earth elements have been dissolved, and that’s true for the world,” Trump said. “China will keep its rare earth exports flowing, which are vital to many industries.”

Rare earth supply has been a volatile point in U.S.-China relations, particularly due to China’s dominant position in extraction and processing. Previous restrictions on rare earth exports have raised global concerns about supply chain security for high-tech sectors, renewable energy and defense applications. Trump praised Xi Jinping as a “very tough negotiator” and described the two countries’ growing relations as a long-standing friendship. This landmark one-year agreement follows a preliminary framework agreement reached in Kuala Lumpur and paves the way for enhanced trade cooperation amid fluctuating geopolitical tensions. This reflects a easing in the protracted tariff fight and mutual interest in stabilizing critical supply chains.

Beijing has so far not commented on any of this.

The signing of the agreement marks an important step towards resolving the intertwined economic and strategic interests between the world’s two largest economies.