U.S. and China Reach Tentative Deal to Delay Tariffs and Rare Earth Controls

What Happened

The United States and China have outlined a preliminary trade agreement that would temporarily defuse two of the most volatile flashpoints in their economic standoff. Those include sweeping tariffs on Chinese imports and Beijing’s planned restrictions on rare earth exports.

The draft deal, brokered by senior officials from both sides, is expected to be reviewed by President Trump and President Xi Jinping during their meeting Thursday at the APEC summit in Gyeongju, South Korea.

Under the proposed arrangement, the United States would delay its scheduled 100% tariff hike on Chinese goods, which was set to take effect on November 1st. In exchange, China would hold off on implementing a new licensing regime that would have tightened state control over exports of rare earth minerals and industrial magnets. These resources are critical to electronics, electric vehicles, and weapons systems.

Negotiations were led by U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer, alongside Chinese Vice Premier He Lifeng and Commerce Minister Wang Wentao. According to U.S. officials, the talks were described as “intense but forward moving.” Bessent also indicated that China would resume large-scale purchases of U.S. soybeans, which had been abruptly halted in September. That move is seen as a goodwill gesture toward U.S. farmers as well as the agricultural lobby.

Other contentious issues surfaced during the negotiations, including the ownership structure of TikTok, the role of Chinese precursors in the fentanyl trade, and the status of Taiwan. The Biden-era case of Jimmy Lai, the imprisoned Hong Kong media mogul, was also raised, although Chinese officials reportedly dismissed it.

Why It Matters

The framework points to a deliberate move away from full-scale confrontation toward managed competition. Rare earth minerals are not trivial commodities. They are foundational to both economies as well as to global manufacturing.

China controls the vast majority of global rare earth processing capacity, giving it leverage over entire supply chains. By pausing its new licensing regime, Beijing is offering a temporary reprieve that U.S. industries, particularly those in defense and technology, will welcome.

On the other side, Trump’s decision to delay the 100% tariff hike shows a willingness to give some negotiation room. His administration remains deeply skeptical of Chinese intentions. The tariff threat was not idle and had already begun rattling markets and drawing concern from U.S. importers, especially in retail and electronics.

Although this draft deal does not resolve deeper structural issues like intellectual property, industrial espionage, and China’s expanding influence in global trade architecture, it does buy time. In a political and economic climate that has rewarded hardline posturing, this agreement suggests that both sides understand how costly escalation could be.

The deal also reflects a changing sentiment in diplomatic choreography. This is bilateral brinksmanship, steered by two strong-willed leaders and their handpicked teams. The outcome will depend on personal decisions made at the highest level, not committee votes or multilateral frameworks.

How It Affects You

For those working in tech, defense manufacturing, or auto production, the stability this framework offers, should it be finalized, could prevent major supply chain disruptions. The rare earth pause protects access to critical inputs, and a tariff delay helps avoid price spikes on consumer goods and imported components.

For American farmers, China’s return to the soybean market could ease some of the pressure that has built up in recent months. With exports down and markets tightening, renewed Chinese purchases would offer short-term relief and potentially stabilize prices.

This agreement shows that economic pressure is now central to U.S. foreign policy. While this framework may slow the conflict, it does not end it. The structural divide remains. What is being tested now is how long the two largest economies in the world can manage that divide without tipping into something more volatile.