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China will ease an export ban on automotive computer chips and suspend export controls on rare earth minerals for a year as part of a new trade deal with the United States, officials announced Sunday.
The agreement was reached following a meeting between U.S. President Donald Trump and Chinese leader Xi Jinping in South Korea. The deal also includes measures on U.S. soybean exports and the materials used in the production of fentanyl.
U.S. Treasury Secretary Scott Bessent described China as an “unreliable partner” in an interview with CNN, saying Washington must reduce dependence on Beijing, especially in the supply of rare earth minerals.
“We don’t want to decouple from China but we need to de-risk,” Bessent said. “We’re going to go at warp speed over the next one to two years, and we’re going to get out from under this sword the Chinese have over us.”
He emphasized the importance of securing access to critical minerals used in high-tech products, accusing China of using export controls to gain leverage.
The White House confirmed the new trade deal in a fact sheet released after the Trump-Xi meeting, stating that China will resume exports of automotive computer chips from Nexperia facilities in China.
Beijing will “take appropriate measures to ensure the resumption of trade,” allowing production of critical chips to flow to the rest of the world, the statement said.
The announcement follows concerns over global shortages that had prompted companies like Volvo, Volkswagen, and Jaguar Land Rover to warn of potential shutdowns.
Sigrid De Vries, director general of the European Automobile Manufacturers’ Association, told the BBC that while easing the ban was “positive news,” the supply shortages “are still looming” due to earlier disruptions.
Under the deal, Beijing will pause export restrictions on rare earth minerals, vital for producing cars, planes, and weapons, for one year.
China also agreed to buy 12 million tonnes of U.S. soybeans in the final two months of 2025 and 25 million tonnes annually over the following three years.
The White House said China would take “significant measures” to curb the flow of chemicals used in fentanyl production, while the U.S. will lower tariffs imposed to address the issue.
A spokesperson for the Chinese Embassy in Washington said details of the agreements were shared by “competent authorities” and stressed that China-U.S. economic relations were “mutually beneficial.”
“President Xi Jinping noted that the business relationship should continue to serve as the anchor and driving force for China-U.S. relations, not a stumbling block or a point of friction,” the spokesperson said.
The framework agreement marks a temporary truce after months of escalating tariffs between the world’s two largest economies.
However, Bessent warned that the U.S. must remain cautious, saying, “They’ve shown themselves to be an unreliable partner in many areas.”
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