🇺🇸🤝🇨🇳 On June 11, 2025, the United States and China reached a framework trade agreement focused on rare earths and tariffs. This marks a significant step forward after months of escalating tension between the world’s two largest economies.
🌍 Under the agreement, China – which currently accounts for 60% of global rare earth production and nearly 90% of processing capacity – will resume exports of rare earths and magnets to the United States. Export licenses will be valid for six months, temporarily stabilizing supply chains for key U.S. sectors such as EVs, semiconductors, and advanced tech.
💼 On the U.S. side, the total tariff rate on Chinese goods is reportedly 55%, composed of several layers from previous administrations and newly added measures. However, some sources suggest the effective base rate may have been reduced to 30%, indicating a lack of clarity in how the tariffs are calculated.
🎓 The U.S. has also agreed to continue granting student visas to Chinese nationals, reversing earlier threats of suspension. Around 280,000 Chinese students are currently enrolled in U.S. universities. In return, China has reduced tariffs on U.S. imports to 10%, down significantly from the 125% peak in April.
📊 Market reactions have been mild: FTSE +0.1%, Nikkei +0.6%, Hang Seng +0.8%, Nasdaq -0.5%. This suggests investors are waiting for further details, especially regarding legal disputes over certain tariff components.
📌 While the June 11 agreement is not a long-term resolution, it is a positive signal for easing trade tensions. Given the strategic importance of rare earths in high-tech manufacturing, global investors and businesses should keep a close watch on how this deal unfolds.
#RareEarth #USChinaDeal2025