The U.S.–China trade standoff has morphed into a rare-earth standoff-turned-breakthrough, as a last-minute mineral pact scrambles expectations just weeks before the tariff truce expires.
At a Glance
- A short-term tariff rollback remains in place through mid-August, with duties cut to 30% (U.S.) and 10% (China).
- On June 27, both nations signed a deal to fast-track rare-earth mineral exports to the U.S.
- The U.S. agreed to ease certain export controls on Chinese industrial components.
- Treasury Secretary Bessent admitted the U.S. is using “strategic uncertainty” to disorient Chinese negotiators.
- Analysts warn the rare-earth deal is only a partial fix, not a structural settlement.
The Fragile Truce—and the Sudden Deal
After months of brinkmanship and emergency talks, negotiators in London and Geneva appeared deadlocked—until a rare-earth breakthrough was quietly signed on June 27. The agreement will expedite shipments of Chinese magnets and rare-earth elements to U.S. manufacturers in sectors like EVs and aerospace. In exchange, the U.S. will roll back portions of its export control regime on Chinese electronic components.
Yet even as markets surged on the news, insiders noted that the broader 90-day tariff freeze—initiated May 12—remains unchanged, with the looming deadline still set for mid-August. Trump’s team continues to embrace what Treasury Secretary Scott Bessent calls “strategic uncertainty,” a calculated policy of ambiguity meant to destabilize China’s negotiating posture.
Watch a report: What China Wants From the U.S.—FT Economics Show.
Strategic Minerals, Tactical Gains
With the Made in China 2025 program still at the heart of Beijing’s industrial push, China’s dominance over rare earths remains its sharpest negotiating weapon. The June 27 agreement may momentarily defuse this leverage—but only on the surface. According to FT analysts, China has made no concessions on deeper structural issues like subsidies, transparency, or dual-use licensing.
American negotiators continue to demand reforms around intellectual property, state overcapacity, and fair competition—demands which Beijing so far treats as strategic overreach. Meanwhile, U.S. industries are rushing to secure supply lines before this temporary deal’s goodwill evaporates.
What’s Ahead: Countdown to Collision
While markets reacted positively, the so-called mineral pact does little to alter the underlying crisis. Experts warn it’s a “deallet,” not a deal—a tactical gesture meant to extend the clock rather than solve the dispute. If no comprehensive trade pact is signed by mid-August, the 30% tariffs could snap back to triple digits overnight.
Both governments now face a brutal choice: escalate into a second trade war, or surrender leverage for the sake of global market stability. For now, rare-earths are flowing—but the real power games are just beginning.