The United States and China have resolved issues surrounding shipments of rare earth minerals and magnets to the U.S., Treasury Secretary Scott Bessent said Friday, ironing out a dispute that stalled a deal reached in May.
As part of its retaliation against new U.S. tariffs, China suspended exports of a wide range of critical minerals and magnets, upending supply chains central to automakers, aerospace manufacturers, semiconductor companies and military contractors around the world.
During U.S.-China trade talks in May in Geneva, Beijing committed to removing the measures imposed since April 2, but those critical materials were not moving as fast as agreed, Bessent said in an interview with Fox Business Network, so the U.S. put countermeasures in place.
"I am confident now that we — as agreed, the magnets will flow," Bessent said.
Efforts to resolve the dispute included a phone call between U.S. President Donald Trump and Chinese President Xi Jinping which led to teams from both sides meeting again in London, as negotiators try to end a trade war between the world's biggest economies.
Trump said on Thursday the United States had signed a deal with China the previous day, but did not provide details.
A White House official said the United States has reached an agreement with China on how to expedite rare earth shipments to the U.S.
"The administration and China agreed to an additional understanding for a framework to implement the Geneva agreement" that involved expediting their shipments to the U.S., the official said on Thursday.
China's commerce ministry said on Friday the two countries have confirmed details on the framework of implementing the Geneva trade talks consensus. It said China will approve export applications of controlled items in accordance with the law. It did not mention rare earths.
China has dual-use restrictions in place on rare earths which it takes "very seriously" and has been vetting buyers to ensure that materials are not diverted for U.S. military uses, according to an industry source. This has slowed down the licensing process.
The Geneva deal faltered over China's curbs on critical minerals exports, prompting the Trump administration to respond with export controls of its own preventing shipments of semiconductor design software, aircraft and other goods to China.
In early June, Reuters reported China had granted temporary export licenses to rare-earth suppliers of the top three U.S. automakers, according to two sources familiar with the matter, as supply chain disruptions began to surface.
Later in the month, Trump said there was a deal with China in which Beijing would supply magnets and rare earth minerals while the U.S. would allow Chinese students in its colleges and universities.
While the agreement shows potential progress following months of trade uncertainty and disruption since Trump took office in January, it also underscores the long road ahead to a final, definitive trade deal between the two economic rivals.