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Historic Agreement Between Trump and Xi
In a major development for global trade, U.S. President Donald Trump announced on Friday, June 6, 2025, that Chinese President Xi Jinping has agreed to resume the export of rare earth minerals and magnets to the United States. The decision marks a significant step toward easing tensions between the world’s two largest economies, which have been locked in disputes over tariffs, technology, and critical mineral supplies.
Background of the Rare Earth Dispute
Rare earth minerals are essential components in high-tech industries, including electric vehicles, defense systems, and semiconductor manufacturing. China dominates the global supply chain for these materials, and its recent export restrictions had raised concerns among U.S. automakers, defense contractors, and technology firms.
In April 2025, China imposed new export controls on seven rare earth elements, further straining trade relations. The restrictions disrupted supply chains, prompting the U.S. to seek alternative sources and accelerate domestic production efforts.
Details of the Agreement
During a 90-minute phone call on Thursday, June 5, Trump and Xi discussed trade relations, focusing on rare earth minerals and magnets. Trump later confirmed to reporters aboard Air Force One that Xi had agreed to restart exports, stating, “Yes, he did.”.
As part of the agreement:
- China has granted temporary export licenses to critical mineral suppliers for major U.S. automakers.
- The U.S. and China will resume trade negotiations on June 9 in London, with U.S. Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and U.S. Trade Representative Jamieson Greer leading the discussions.
- The agreement follows a tariff truce reached in May 2025 in Geneva, where both nations agreed to roll back most tariffs for 90 days.
Impact on Global Markets
The announcement has boosted investor confidence, with financial markets rallying on expectations of improved trade relations. Analysts predict that the resumption of rare earth exports will stabilize supply chains and reduce production costs for U.S. manufacturers.
However, some uncertainties remain, as China has yet to fully lift restrictions on certain rare earth elements. The next round of trade talks will likely address long-term supply agreements and potential concessions from both sides.
Next Steps in U.S.-China Trade Relations
- June 9, 2025: High-level trade negotiations resume in London.
- Further discussions on tariffs, technology exports, and rare earth supply chains.
- Potential easing of U.S. restrictions on Chinese tech firms in exchange for expanded mineral exports.
This breakthrough signals a positive shift in U.S.-China trade relations, with both nations working toward economic stability and cooperation.
