China Extends Rare Earth Export Pause for Two Months Ahead of Trump-Xi Summit

China has announced a two-month suspension of export controls on certain critical minerals, extending a trade truce agreed upon by Washington and Beijing. This move comes ahead of an anticipated meeting between Presidents Donald Trump and Xi Jinping during the Asia-Pacific Economic Cooperation (APEC) summit in Shenzhen next week. The announcement from China's Ministry of Commerce formalizes an agreement to prolong a bilateral trade truce that was slated to expire on Tuesday, with the extension now running until January 10.

In addition to the mineral export pause, China's finance ministry stated that a 24 percent tariff on US goods will also be suspended for two months, though a 10 percent fee will remain in place. Concurrently, the Office of the US Trade Representative confirmed the suspension of actions related to a Section 301 investigation into China's maritime and logistic sectors. The US is also extending 178 existing Section 301 tariff exclusions on Chinese goods.

This development follows China's previous imposition of export controls on seven heavy rare earth elements in April, which was later expanded in October. Earlier, China had also implemented export curbs on battery supply chain components, including cathode materials, cathode precursors, and graphite anode materials, which had heightened trade tensions with Washington and raised concerns about a potential global supply chain crisis. China's dominance in the rare earth market is significant, accounting for 60 percent of global mined production of magnet rare earths and 91 percent of global refined output in 2024, according to the International Energy Agency. Its share in permanent magnet production is even higher.

The current trade truce, initially established for one year in October during a summit in Busan, South Korea, had paused retaliatory tariff measures, deferred rare earth curbs, and included a commitment from China to resume soybean imports from the US. However, recent exchanges have seen US officials urging China to fully implement its commitments. Treasury Secretary Scott Bessent reportedly pressed Chinese Vice Premier He Lifeng to uphold its Busan pledges, while also voicing concerns over recent Chinese actions. US Trade Representative Jamieson Greer echoed the importance of China fulfilling its commitments, particularly concerning agricultural purchases and critical minerals.

A former senior US official noted that efforts are underway between the Treasury and the White House to monitor China's adherence to various commitments made since the Busan meeting, encompassing not only critical minerals but also agricultural products and specific company deals. This official suggested that some within the US government believe China has overpromised and underdelivered, with critical minerals being a key focus of recent US diplomatic efforts.

Meanwhile, China has expressed