The US and China have finalized a trade understanding first brokered last month in Geneva, US Commerce Secretary Howard Lutnick has announced, signaling a potential thaw in the trade war. The deal includes a commitment by China to resume supplying rare-earth minerals critical to numerous industries, Lutnick told Bloomberg on Friday.
Tensions between the world鈥檚 two largest economies escalated in April when US President Donald Trump imposed sweeping tariffs on over 90 countries, including China, citing trade imbalances. Beijing retaliated, triggering spiraling tariff hikes that reached 145% by the US and 125% by China. After talks in Geneva last month, the two sides agreed to pause most new tariffs. But since then, each has accused the other of violating the terms and stalling negotiations on issues such as export controls.
The latest agreement reportedly reflects terms negotiated in previous trade talks, but its success depends on the follow-through from both sides, particularly China鈥檚 delivery of rare-earth materials.
鈥淭hey鈥檙e going to deliver rare earths to us鈥 and once they do that, 鈥渨e鈥檒l take down our countermeasures,鈥 Lutnick told Bloomberg, adding that the trade deal was signed two days ago and that it cemented commitments made during earlier talks.
The Geneva deal had reportedly faltered over China鈥檚 curbs on critical minerals exports, prompting the Trump administration to respond with export controls of its own preventing shipments of semiconductor design software, aircraft, and other goods to China.
China鈥檚 suspension of exports of a broad range of critical minerals and magnets had disrupted global supply chains vital to automakers, aerospace firms, semiconductor makers, and military contractors.
A separate White House official cited by Reuters said that Washington had reached a rare-earth shipment agreement with Beijing focused on 鈥渉ow we can implement expediting rare earths shipments to the US again.鈥
China has been taking its dual-use restrictions on rare earths 鈥渧ery seriously鈥 and has been vetting buyers to ensure that materials are not diverted to US military uses, Reuters said, citing an industry source. This has slowed down the licensing process.
While addressing an event in support of the 鈥渂ig, beautiful bill鈥 at the White House on Thursday, Trump said the US had signed a deal with China on Wednesday, without providing details, and suggested a separate agreement could be coming that would 鈥渙pen up鈥 India. He hinted that a 鈥渧ery big鈥 deal with India was in the works.