In a major development in the ongoing US-China trade saga, President Donald Trump announced on June 11, 2025, that a trade framework with China has been finalized, including a critical agreement for Beijing to supply rare earth minerals to the United States.
This deal, described by Trump as ‘done,’ also includes provisions for Chinese students to access American universities, marking a potential thaw in the frosty relations between the two economic giants.
As trade tensions have escalated in recent months, this agreement could have far-reaching implications for industries reliant on rare earths, from technology to defense.
China’s dominance over rare earth minerals
Rare earth minerals are a group of 17 elements essential for manufacturing a wide range of high-tech products, including smartphones, electric vehicles, military equipment, and renewable energy technologies.
China dominates the global supply chain, accounting for approximately 60% of the world’s rare earth production and a significant portion of refining capacity.
This dominance has long been a point of contention, especially as the US has sought to reduce its reliance on Chinese supplies amid national security and economic concerns.
The trade war between the US and China, reignited under Trump’s administration with tariffs and export controls, has placed rare earths at the center of the conflict.
Earlier in 2025, China imposed export restrictions on these critical materials in response to US tariffs, sending shockwaves through American industries.
Details of the new trade agreement
According to Trump’s announcement on June 11, 2025, China has agreed to supply rare earths up front as part of the broader trade framework.
While specific details regarding volume, pricing, and timelines remain undisclosed, Trump emphasized that the deal is subject to final approval by both himself and Chinese President Xi Jinping.
Trump specified that the US will impose “a total of 55% tariffs” on Chinese imports, while US goods in China will face only a 10% tariff rate in return.
The 55% tariff rate may initially appear to be an increase from the 30% level agreed during last month’s trade truce, when both countries reduced previously higher tariffs.
However, according to a White House official, the 55% figure reflects the combination of three existing measures: a 10% global “reciprocal” tariff on imports, a 20% levy related to fentanyl trafficking, and a 25% tariff that was already in place on Chinese goods.
Additionally, the agreement includes a provision allowing Chinese students to attend US colleges and universities.
The US will also move to ease restrictions on advanced technology sales to China.
Calling the deal “a great WIN for both countries,” Trump said the agreement would rebalance trade relations while maintaining US leverage through sustained tariff pressure.
Implications for US industries and national security
The rare earths supply deal could provide immediate relief to US industries that have struggled with supply chain disruptions due to China’s earlier export curbs.
Sectors such as consumer electronics, automotive manufacturing (particularly electric vehicles), and defense rely heavily on these minerals.
For instance, rare earths are critical for producing magnets used in military drones and fighter jets, making this agreement a potential boost to national security.
However, questions remain about the extent to which this deal addresses the underlying issue of US dependency on China.
Critics argue that without significant investment in domestic mining and processing capabilities, the US remains vulnerable to future supply shocks.
While Trump has previously signed executive orders to encourage domestic production of rare earths, progress has been limited by environmental regulations, high costs, and the time required to establish infrastructure.
Disclaimer: Portions of this article were generated with the assistance of AI tools and reviewed by the Invezz editorial team for accuracy and adherence to our standards.
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