China Delays Latest Rare Earth Export Controls Following Trump-Xi Meet

China has agreed to postpone implementing its most recent round of rare earth export controls as part of an agreement reached between Presidents Donald Trump and Xi Jinping, though earlier restrictions on the critical minerals that have disrupted global commerce remain in effect, news agency Reuters reported on Thursday.

China's rare-earth metals are in significant demand as the US, the European Union (EU) and India rank amongst its primary importers.

Beijing imposed controls on the export of specific minerals in July 2023 and steadily expanded the number of rare earths subject to these controls since then.

Rare earths, 17 elements which perform minute yet essential functions in cars, planes and weapons, have emerged from relative obscurity to become China's most powerful negotiating tool thanks to export restrictions introduced this year which enable Beijing to sever supply to foreign customers dependent on Chinese sources.

Chinese Commerce Ministry Confirms Cooperation

"China is willing to work with the US to jointly safeguard and implement the important consensus reached at the meeting between the two heads of state," the Ministry of Commerce was quoted as saying by Reuters.

Trade War Détente

Donald Trump said he had an "amazing meeting" with Xi Jinping, the first face-to-face encounter between the two leaders since the former's return to the White House.

The trade war détente would see the US halve fentanyl-related tariffs on Chinese goods. The US president said China also agreed to resume soybean purchases.

Bilateral Cooperation Framework

The two presidents agreed to enhance cooperation in economic, trade, energy and other fields and to encourage more people-to-people exchanges. The two presidents agreed to maintain interactions on a regular basis, with President Trump expressing interest in visiting China early next year.

Xi emphasised that dialogue is better than confrontation, calling for more communication between the two sides and cooperation in areas such as trade, energy and artificial intelligence, according to Xinhua news agency.

Trump also will not push ahead with a 100 per cent increase in tariffs he had threatened ahead of the talks to impose starting next month.

Significance of Rare Earth Elements

The 17 rare earth elements have become strategically critical components in advanced manufacturing, particularly for defence systems, electric vehicles (EVs), renewable energy infrastructure and consumer electronics. China's dominance in rare earth production and processing -- controlling the vast majority of global supply -- has transformed these minerals into a geopolitical bargaining chip amid escalating trade tensions between Washington and Beijing.

Whilst the postponement of additional export controls signals a thaw in US-China relations, the continuation of existing restrictions underscores Beijing's determination to maintain leverage over critical mineral supply chains that underpin Western technological and military capabilities.