President Donald Trump has struck a deal with China’s President Xi Jinping to ease trade tensions between the two countries, with Washington promising to lower tariffs on Chinese exports and Beijing committing to suspending export controls on rare earth minerals.
The two leaders agreed on a trade and economic deal during a meeting in South Korea, where the Asia-Pacific Economic Cooperation, or APEC, summit was recently held.
According to a White House press release, the deal “safeguards U.S. economic strength and national security.”
How Will the New Trade Deal Affect US Industries?
Under the agreement, China said it will suspend the implementation of export controls on rare earth elements, including gallium, germanium, antimony and graphite.
According to the International Energy Agency, Beijing accounts for 61 percent production and 92 percent processing of rare earth minerals, which are used in electronics and military weapons.
China also committed to halt exports of fentanyl precursor chemicals and end retaliatory tariffs on U.S. agricultural products such as soybeans, pork, beef and dairy.
Additionally, the Asian country agreed to resume trade in key commodities, including hardwood logs and sorghum, and ensure production from Nexperia’s semiconductor facilities continues for global supply. China will also lift sanctions on certain American companies and terminate investigations targeting the U.S. semiconductor industry.
What Commitments Did the United States Make in Return?
In exchange, the U.S. will reduce tariffs on Chinese imports by 10 percentage points starting Nov. 10 and extend tariff exclusions under Section 301 through November 2026, lowering cross-border shipping costs.
The U.S. will also suspend for one year certain export control measures and actions tied to maritime and shipbuilding investigations, while continuing trade talks with China and allied coordination with South Korea and Japan.