"Full magnets, and any necessary rare earths, will be supplied, up front, by China," President Donald Trump announced Wednesday on Truth Social. He added that in exchange, the U.S. will permit Chinese students to study in American institutions, calling it "something that has always worked well."
This development follows China's April decision to restrict exports of key minerals, a move prompted by Washington's increased tariffs. At the time, China's Ministry of Commerce defended the restrictions as a necessary countermeasure. The disruption sparked significant concern across global markets, given China's dominance in rare earth processing—accounting for 60% of global production and nearly 90% of refining capacity.
Trump's declaration also came with stark tariff details: "WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%," he claimed. A senior White House official broke this down further, citing a 10% base tariff, an additional 20% penalty for fentanyl trafficking, and a 25% continuation of pre-existing trade levies. China's response tariff will reportedly remain at 10%.
Commerce Secretary Howard Lutnick told reporters the new framework "puts meat on the bones" of the Geneva consensus reached last month, which had stalled after China's rare earth curbs. "This reopens a door that was nearly slammed shut," Lutnick said, referring to resumed cooperation on critical supply chains.
China's Vice Commerce Minister, Li Chenggang, echoed the sentiment, emphasizing mutual benefits while stopping short of confirming long-term commitments. "We see this as a step forward in implementing the consensus of our presidents," he said.
Financial markets reacted quickly. Brent Crude futures rose by $1 to $67.87 per barrel, a 1.8% increase, while U.S. West Texas Intermediate jumped 2.2% to $66.42. Analysts cited renewed trade optimism and eased supply concerns as key drivers.
