The White House announced that China will be lifting its rare earth mineral export restrictions. This decision is part of a broader trade agreement between the U.S. and China.
Tariff Rollback Amid China Restrictions Suspension
The White House disclosed details of the trade deal reached between President Donald Trump and Chinese President Xi Jinping. Among other things, China has agreed to “effectively eliminate” the restrictions it imposed on rare earth mineral exports in October.
The suspension will also cover the issuance of general licenses for exporting rare earths, gallium, germanium, antimony, and graphite, with the goal of supporting U.S. end users and their international supply chains.
The Trump administration said the decision effectively rolls back the restrictions that China implemented in October 2022 and April 2025. The White House has also chosen to suspend the proposed 100% tariffs and delay other duties on Chinese goods for one year.
See Also: Trump Grilled On Stock Market, Inflation And China: 5 Things Investors Should Know
Trade Truce Eases Rare Earth Tensions
China’s rare earth mineral export restrictions have been a point of contention in the U.S.-China trade relationship.
The meeting between President Donald Trump and Chinese President Xi Jinping at the sidelines of the APEC summit in Busan, South Korea, paved the way for this significant trade truce. According to Trump, rare earth issue with China "has been settled," adding that the agreement will be renegotiated annually.
In October, China had tightened its grip on the export of rare earth minerals and related technologies, escalating tensions with Washington. China controls about 70% of rare-earth mining, 90% of separation and processing, and 93% of magnet manufacturing.
Analysts Sound Alarm Over China’s Rare Earth Policy
Veteran economist Jeremy Siegel had criticized the U.S. for not having a strategic reserve of rare earth materials to counter China’s dominance in the sector. Siegel described the situation as scandalous and warned of China’s growing monopoly.
On the other hand, analysts Julian Evans–Pritchard and Leah Fahy suggested that China’s actions were a gamble and could potentially backfire.
Evans-Pritchard and Fahy warned that the U.S. could further pressure China by restricting access to key aviation components or aircraft and by targeting its reliance on Microsoft's (NASDAQ:MSFT) Windows system, which powers most Chinese computers.
In Sunday’s 60 Minutes interview with CBS News, Trump stated that the U.S. has “tremendous rare earth” and it is going to be a “strength.”
Price Action:
On a year-to-date basis, rare earth an minerals ETFs like VanEck Rare Earth/Strategic Metals (NYSE:REMX), Global X Lithium & Battery Tech (NYSE:LIT), and iShares U.S. Basic Materials (NYSE:IYM) surged 78.98%, 55.33%, and 10.93%, respectively, as per data from Benzinga Pro.
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