US-China Rare Earths Agreement: The Mining Impact

US President Donald Trump and Chinese President Xi Jinping have met face to face for the first time in six years – and appear to have "settled" a disagreement regarding rare earths. 

Amid growing tension over trade policy and fears of a lasting trade war, the global powers met in South Korea and agreed a series of closer trade ties. 

President Trump said the US would cut the "fentanyl tariff" on Chinese goods entering the US from 20% to 10%, while China has said it will make it easier for the US to buy rare earths.

Rare earth disagreement

US-China relations have been tense throughout 2025 thanks to Trump's sweeping tariffs and Xi's countermeasures.

In early October, China opted to put more controls on rare earth and critical materials. 

Rare earth elements are a group of 17 metallic elements which have similar chemical properties. While they are not rare in quantity, they are hard to find in a pure form and difficult to extract.

Few locations host these elements in heavy quantity and concentration, where the extraction can be deemed economically viable. 

Currently, the International Energy Agency (IEA) estimates that around 61% of rare earth production takes place in China, as does approximately 90% of the processing, making it a vital country for trade. The elements are critical for the manufacture of solar panels, smartphones and magnets.

The threat of heightened Chinese control would have meant the government having to give approval before rare earth items could be exported. Trump hit back with an additional 100% tariff on imports from China, ending a carefully constructed truce between the two nations.

At the time, a spokesperson for China warned: "Resorting to tariff threats is not the right way to engage with China. China's position on a tariff war has always been consistent: we do not want one, but we are not afraid of one."

Meeting success

Trump and Xi's meeting appears to have been a success and should ease fears of a trade war between the two nations.

The two presidents arrived with different aims and leverage. President Xi Jinping held a clear advantage given China’s dominance of rare earth elements, a pressure point that extends beyond the US

Given their indispensability to modern industry, rare earth elements have become a potent bargaining chip amid Trump’s tariff war.

After the meeting, Trump took to Truth Social to celebrate: "I had a truly great meeting with President Xi of China. There is enormous respect between our two Countries, and that will only be enhanced with what just took place.

"We agreed on many things, with others, even of high importance, being very close to resolved.

"China has agreed to continue the flow of Rare Earth, Critical Minerals, Magnets, etc., openly and freely."

While Trump was typically vocal, Xi is likely to remain tight-lipped until the relevant papers are officially signed.

Xi stated that the US and China should “finalise follow-up work as soon as possible, maintain and implement the consensus and provide tangible results to set minds at ease about the economies of China, the United States and the world". 

Good news for farmers

While rare earths were seen as a top priority for the US heading into the talks, Trump highlighted a series of additional agreements. 

"I was extremely honored [sic] by the fact that President Xi authorised China to begin the purchase of massive amounts of Soybeans, Sorghum, and other Farm products," he said on Trust Social. "Our Farmers will be very happy!

"China also agreed that they will begin the process of purchasing American Energy. In fact, a very large scale transaction may take place concerning the purchase of Oil and Gas from the Great State of Alaska.

"The agreements reached today will deliver Prosperity and Security to millions of Americans."

By diversifying its supplier base to include US products, China signals that the US is seen as a valuable trade partner while strengthening its own supply chains.

Many feared a US-China trade war. If this meeting produces written agreements and leads to further talks, it could mark the start of a more constructive trade relationship.