Tense months of tit-for-tat trade sniping between Washington and Beijing might finally be cooling off. Officials from both countries say they’ve reached a broad agreement in London that could pave the way for smoother trade — and possibly reboot the frozen supply chain of critical rare earth minerals.
There’s still no official document to pore over, and both sides have taken the proposed framework back to their leaders for approval. But negotiators struck an optimistic tone rarely seen in recent years of US-China trade diplomacy.
Rare Earths Take Center Stage in Fragile Agreement
While details remain under wraps, negotiators hinted that rare earth minerals and magnet shipments — hot-button issues for both governments — are poised to become less contentious.
In recent years, rare earths have become geopolitical flashpoints. These elements power everything from electric vehicles and smartphones to advanced military systems. And China controls around 60% of global production.
So when talks in Geneva last month ended with vague promises, few expected real movement. But now, the new framework reached in London seems to outline how both sides will handle export controls, transparency, and domestic use of these critical resources.
One US official, speaking off the record, said, “We absolutely expect this deal to remove blockages on rare earth shipments. It’s been a mess, and industry pressure is mounting.”
This has rattled tech companies and defense contractors alike. A single hiccup in China’s export of neodymium, for example, can jam up entire production lines in the US.
A Rare Bout of Optimism on Both Sides
It wasn’t just Washington that left the London round feeling positive. Li Chenggang, China’s chief trade negotiator, confirmed both delegations “reached consensus on the framework” and will now “report back to respective leadership for guidance.”
This step — bringing the plan home to each nation’s executive — signals a turning point. It doesn’t mean a deal is done. But it’s the furthest the two nations have gotten since tariffs first started flying back in 2018.
For the record:
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Talks began in Geneva weeks ago but lacked actionable outcomes.
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London’s round focused on converting earlier consensus into an actionable plan.
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Rare earths, magnets, export protocols, and surveillance requirements dominated the agenda.
And in case there’s any doubt — both teams want this deal. Trade slumps are hitting both economies at awkward moments: China’s post-COVID rebound has been sluggish, and the US faces inflationary pressure tied to constrained supply chains.
Where the Two Sides Still Disagree
Even with momentum building, areas of friction remain.
Beijing is reluctant to drop its tight control over strategic exports. Washington, meanwhile, wants more visibility into how these materials are allocated, especially when US-bound shipments lag behind others.
There’s also disagreement over what counts as a “sensitive technology.” The US has broad definitions, especially post-CHIPS Act. China considers several American licensing requirements “hostile.”
Then there’s the elephant in the room: surveillance and compliance. A draft proposal reportedly included a requirement for third-party verification of magnet origin, something China has historically opposed.
But US officials insist they’re not asking for access to Chinese firms — just guarantees that goods meet fair-market rules.
Market Watchers React with Cautious Enthusiasm
Traders didn’t wait for full details to react.
In early trading after news of the tentative pact broke:
| Sector | Movement (%) | Notes |
|---|---|---|
| Rare Earth Producers | +4.1% | Anticipated restart of export flows |
| Tech Stocks (US) | +1.7% | Reduced concerns about supply shocks |
| Defense Contractors | +0.9% | Relief from potential magnet shortfall |
Investors, however, remain cautious. They’ve been burned before by apparent breakthroughs that didn’t pan out.
Still, if formalized, this agreement could soften the hard edges of US-China trade for the first time in years.
What’s Next: Timing, Trust, and Translating Words into Action
The biggest question now is when. There’s no timeline yet for when leaders — President Biden and President Xi — will officially endorse the framework.
That matters. Because without that stamp of approval, all this optimism could unravel fast.
One US official warned, “We’re not popping champagne. We’re treating this like halftime — not the final whistle.”
Still, the structure is in place. Once both capitals sign off, the next phase would involve aligning bureaucracies and rewriting export and customs protocols.
That’s not small stuff. But trade analysts say this pact — if executed — could be the closest thing to a “reset” the two countries have had in half a decade.
Quiet Diplomatic Work, Loud Global Impact
What’s striking here isn’t just what’s in the deal. It’s how it happened.
While headlines have been dominated by military drills, spy balloon accusations, and tech bans, these talks have unfolded quietly, without grandstanding or media blitzes.
That might’ve helped. Fewer eyes mean less political posturing.
One former White House trade official said, “Honestly, this is the best-kept secret in international trade. And maybe that’s why it’s working.”
