Washington and Beijing have extended their trade truce through January 2027, preserving current tariff terms and keeping tighter restrictions on Chinese rare earth exports on hold. But the short extension leaves the broader struggle over critical minerals unresolved.
U.S.-China trade truce extended through January 2027
The United States and China have agreed to extend their trade truce, keeping lower tariffs in place for longer and helping preserve access to Chinese rare earth exports. The agreement confirms comments made by U.S. Treasury Secretary Scott Bessent as Chinese President Xi Jinping arrived in Washington for a three-day state visit.
The deal between Donald Trump and Xi Jinping, reached in October 2025 during a meeting in South Korea, had been due to expire on Nov. 10. It will now remain in effect until Jan. 10, 2027.
That means tighter restrictions on Chinese rare earth exports will remain suspended for another two months. Could the U.S.-China talks have delivered more? Many observers had expected an extension of at least six months, if not longer. A two-month reprieve may therefore disappoint some U.S. importers that had hoped for another full-year renewal of the trade agreement announced in South Korea last year.
Still, maintaining current tariff rates and trade rules through the end of 2026 could provide some short-term stability.
The outcome of the Trump-Xi meeting may help manage trade restrictions in the near term, but competition over control of rare earth supply chains remains unresolved. Given the strategic importance of these materials, that rivalry is unlikely to disappear anytime soon.
Talks on key issues, including rare earth supplies, pushed back
The summit did not renew the year-long truce. Instead, it postponed negotiations over some of the most contentious issues, including tariffs, Chinese purchases of U.S. goods, rare earth supplies and technology restrictions, until the next round of talks.
U.S. officials have said Chinese rare earth deliveries have fallen short of expectations, once again highlighting the gap between Washington and Beijing on critical mineral supplies.
Few expected the meeting between Donald Trump and Xi Jinping to fundamentally change the regulatory framework China has carefully built around export controls. At most, the summit offered an opportunity to improve predictability for buyers, and it appears to have delivered some progress on that front.
That helps explain the red-carpet treatment and unusually warm welcome Xi and his wife received from President Trump and first lady Melania Trump on the tarmac. Trump’s decision to personally greet Xi at Joint Base Andrews was a rare presidential protocol gesture and underscored the importance the White House placed on the visit.
Trump-Xi meeting: what happened in October 2025
The year-long truce announced in October 2025 included provisions suspending some tariffs and a Chinese commitment to maintain rare earth exports. The United States reduced some tariffs on Chinese goods, while China stepped back from plans to tighten restrictions on rare earth mineral exports for at least one year.
Beijing has now reiterated its commitment to maintaining secure and stable global industrial and supply chains for critical minerals, while stressing that dual-use exports will remain subject to legal and national security reviews.
In April 2025, China’s Ministry of Commerce and General Administration of Customs imposed export controls on several medium and heavy rare earth elements, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium. Exporters were subsequently required to obtain licenses.
The measure was not an outright export ban. Instead, it placed access to these rare earth materials under a specific regulatory framework based on licensing, end-use checks and national security assessments.
Rebuilding U.S. rare earth production capacity will take time
China processes most of the rare earth minerals used worldwide in consumer electronics, clean energy technologies and military applications. Much of the industrial-scale technology underpinning that processing capacity was developed in China, giving Beijing a major advantage across the supply chain.
In 2010, the U.S. Government Accountability Office estimated that rebuilding a domestic supply chain covering mining, separation and magnet manufacturing could take as long as 15 years.
Beijing had already restricted exports of rare earth separation technology in December 2023. Since then, Washington has committed billions of dollars to rebuilding domestic production capacity.
The Pentagon acquired $400 million in preferred shares in rare earth producer MP Materials, giving the U.S. government a 15% stake in the company, which is expected to begin equipment testing in 2028.
The Commerce Department also backed USA Rare Earth in 2026. An initial letter of intent proposed up to $277 million in direct funding and a $1.3 billion loan for the development of an integrated U.S. rare earth supply chain. The agreement was finalized in June, supporting projects in Texas, Oklahoma and South Carolina.
The United States has therefore committed substantial resources to rebuilding its domestic rare earth industry, but creating a fully integrated supply chain remains a long-term undertaking.
Beijing’s geopolitical leverage over rare earths
China introduced a series of rare earth export controls in 2025 before agreeing to suspend some of the tighter measures through Nov. 10, 2026, a suspension that has now been extended into January 2027.
Control over the supply of strategic materials can give governments leverage by slowing a rival’s industrial and technological development, and Beijing has used its dominant position in rare earth processing as a negotiating tool.
At the same time, some Chinese export restrictions were never suspended, including licensing requirements introduced in April 2025 for seven categories of medium and heavy rare earth materials.
For the United States, continuing to rely on Chinese processing remains the cheaper option, but it also leaves U.S. industries exposed to policy decisions made in Beijing. Rebuilding the supply chain domestically requires billions of dollars, years of investment and the management of significant environmental impacts, including acidic and radioactive waste.
Cooperation with allies such as Australia and Japan offers Washington another way to reduce its exposure to Chinese supply chains. For now, however, China’s dominance in rare earth processing and its strict controls over key technologies will continue to constrain U.S. efforts to establish a fully independent supply chain.
