Highlights

• U.S. and Vietnam negotiate a trade deal lowering tariffs to 20%, with strategic implications for rare earth supply chains and manufacturing.
• China warns of 'resolute countermeasures' in response to the trade agreement, signaling potential geopolitical tensions.
• The deal could reshape regional rare earth metal flows and challenge China's current market dominance in critical minerals.

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In a fiery response to President Donald Trump’s newly announced trade deal with Vietnam, China’s Ministry of Commerce (opens in a new tab) issued a sharp rebuke Thursday, warning of “resolute countermeasures” against any actions perceived to harm its economic interests.

The U.S.-Vietnam agreement, covered by multiple mainstream (opens in a new tab) media and announced July 2, lowers tariffs on Vietnamese goods to 20%—a significant reduction from the expected 46% hike under Trump’s reciprocal tariff framework set to activate July 9. Goods transshipped through Vietnam from third countries, however, will face a punitive 40% levy. In return, Vietnam has reportedly agreed to grant the U.S. zero-tariff market access for American exports.

“China is clearly alarmed,” said Axiosreporters Niamh Rowe and others covering the development. The Chinese government’s concern likely stems from Vietnam’s growing role as a strategic counterweight in critical manufacturing, especially as U.S. trade policy pivots toward Southeast Asia.

For rare earth investors, this deal could have far-reaching implications:

• Is Vietnam becoming the next major supplier of rare earths for the U.S.? Vietnam is home to the world’s second-largest REE reserves after China (but not much of a producer). If Washington can solidify market access, it could support U.S.-backed downstream investments and mitigate supply chain risks.
• Will China retaliate by tightening REE export controls again? Beijing has already imposed licensing restrictions on rare earth permanent magnets. Countermeasures could further restrict high-tech metals.
• Does this signal a reconfiguration of Asian REE flows? A 40% tariff on Chinese-origin materials transshipped through Vietnam raises questions about how regional processors, traders, and OEMs will adapt.

The deal follows similar moves by the U.S. and U.K. to insulate strategic supply chains from Chinese influence. Commerce Secretary Howard Lutnick framed the Vietnam deal as a “massive win for U.S. business,” but Beijing’s reaction underscores the geopolitical high stakes.

With July 9 looming as a potential tariff inflection point and further trade realignments expected, investors should closely monitor how rare earth supply agreements, particularly those with ASEAN nations, evolve under pressure from both Washington and Beijing.

Some Questions: Will Vietnam emerge as a rare earth refining hub—and how quickly can it scale to meet U.S. defense and EV demand?  REEx estimates that Vietnam is some years away. Any connection to Myanmar supplies?

Rare Earth Exchanges (REEx) empowers investors with trusted insights into the rare earth and critical minerals value chain.

Source: Axios, Fox Business, Trump Truth Social, Ministry of Commerce PRC, The Hill | Compiled by REEx Newsroom