Tech Industry Relieved as U.S.-China Agreement Temporarily Halts Rare Earth Export Restrictions
- U.S. and China agree to a one-year trade framework suspending key tariffs and rare earth export controls to ease tensions. - The deal avoids a 100% U.S. tariff on Chinese goods and delays China's rare earth restrictions critical to tech and defense sectors. - China resumes soybean purchases, benefiting U.S. farmers, while U.S. reduces fentanyl-related tariffs from 20% to 10%. - Success hinges on China's enforcement of rare earth policies and U.S. adherence to export controls, per analysts.
Officials have revealed that the United States and China have come to a tentative trade agreement aimed at preventing further tariff hikes and regulatory disputes, with both nations consenting to halt major actions for the next year. This arrangement, made public prior to a summit between President Donald Trump and Chinese President Xi Jinping during the APEC gathering in South Korea, involves the U.S. dropping its proposed 100% tariff on Chinese imports, while China postpones restrictions on rare earth exports vital to the global technology and defense industries, according to
A major aspect of the agreement is China’s decision to put on hold its planned rare earth export curbs, which had raised concerns among U.S. sectors dependent on these minerals for electric vehicles, chips, and defense hardware. In return, the U.S. will not implement the 100% tariff that was scheduled for November 1. China’s suspension of rare earth controls will extend for one year as it reassesses its policy, immediately benefiting companies such as
The agreement also tackles the fentanyl issue, with Trump announcing a reduction in U.S. tariffs on Chinese products associated with fentanyl production from 20% to 10%. This step comes after Xi pledged that China would step up efforts to prevent the export of chemicals used in illegal fentanyl manufacturing. "They are going to make a strong effort to halt the flow," Trump said aboard Air Force One following the summit, describing the talks as "an incredible meeting,"
The timing of the agreement is notable, coming just before the November 10 expiration of the current trade truce and ahead of the APEC summit. Although Beijing has yet to officially confirm the Trump-Xi meeting, insiders suggest both governments are working toward finalizing the deal during the summit. The temporary halt on tariffs and export restrictions brings immediate reassurance to global markets, which had been bracing for renewed instability. Experts point out that the ultimate success of the agreement will hinge on both countries following through, especially regarding China’s rare earth policies and U.S. export regulations,
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