Trump Secures Mineral Deals and Trade Truce With China

President Donald Trump secured a short-term trade agreement with Chinese President Xi Jinping in Busan, South Korea, to mitigate economic risks and stabilize critical mineral supplies. Under the deal, China will purchase large quantities of U.S. soybeans and pause additional export restrictions on critical minerals for one year. In exchange, the United States will lower import tariffs on Chinese goods, roll back specific port fees, and remove trade sanctions on companies with at least 50% Chinese ownership.

This diplomatic breakthrough follows a period of high tension sparked by China's October export controls on rare earths and processing technologies. To diversify supply chains, Trump signed critical mineral agreements with Australia, Malaysia, Thailand, Cambodia, Vietnam, and Japan. In Tokyo, Trump and Prime Minister Sanae Takaichi established a nonbinding framework and a Rapid Response Group to identify supply vulnerabilities and fund mining projects.

Domestically, the administration is utilizing industrial policy to support seven strategic industries, including taking equity stakes in firms such as Trilogy Metals, Lithium Americas, and MP Materials. Treasury Secretary Scott Bessent indicated the government will use price floors and forward buying to support these sectors. Despite the truce, analysts from Goldman Sachs suggest it could take a decade for the West to challenge China's dominance, as Beijing controls approximately 92% of global rare-earth refining.