Highlights

• U.S. and Chinese officials drafted a framework deal at the ASEAN Summit in Kuala Lumpur.
• The deal would delay China's rare earth export licensing by one year in exchange for pausing threatened 100% U.S. tariffs.
• The tentative agreement links rare earth stability with broader economic détente, including:
  • China resuming large-scale U.S. soybean purchases.
  • Washington refraining from tariff escalation beyond November 10.
• If ratified at the Trump-Xi summit, the deal provides a 12-month window for Western nations to accelerate rare earth production diversification.
• China's 90% market dominance in rare earth production remains intact.

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Will rare earths find a diplomatic lifeline in Kuala Lumpur? In an unexpected turn at the ASEAN Summit in Kuala Lumpur, U.S. and Chinese negotiators appear to have laid the groundwork for a temporary easing of one of the world’s most volatile economic fault lines—the rare earth supply chain. According to Reuters (opens in a new tab), Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer met with Chinese Vice Premier He Lifeng and trade negotiator Li Chenggang to draft a framework deal for Presidents Trump and Xi Jinping to finalize later this week.

The breakthrough? China will reportedly delay its new rare earth export licensing regime by one year, while the U.S. will pause its threatened 100% tariffs on Chinese goods. That pause alone may steady prices and temper the fears that have haunted the electric vehicle and semiconductor industries for months. 

Is this really a surprise?  Rare Earth Exchanges (REEx) has gone on the record that the U.S. and China have no choice but to soften their stances, at least for the short run.  But the two nations’ heads meet later this week, so we’ll see what truly unfolds.

The Art of the Truce: Strategic Soybeans and Subsurface Diplomacy

The tentative deal links rare earth stability with a broader economic détente: China will resume large-scale U.S. soybean purchases, and Washington will refrain from escalating tariffs beyond the November 10 deadline. It’s classic transactional diplomacy—agriculture for minerals, tariffs for time.

So, how far have we come from so-called Liberation Day declarations?

For global manufacturers, the significance is immediate. China controls over 90% of the global rare earth supply, from extraction to magnet-making. Any policy shift—even a pause—reverberates through every corner of the supply chain, from automakers in Michigan to chip fabs in Taiwan. The provisional rare earth reprieve, if ratified in Seoul this Thursday, could buy the West a critical twelve months to build or finance non-Chinese processing capacity.

Parsing the Story: What’s Real, What’s Wishful

Based on current reporting, the claims are largely credible. _Reuters_’ sources cite direct statements from both sides, and the details align with prior U.S. Treasury and trade briefings. Still, readers should note the political choreography: Chinese officials characterized the deal only as a “preliminary consensus”, suggesting Beijing’s caution while Washington trumpets momentum. Keep an eye on any gaps between messaging.

The idea of a one-year delay in rare earth curbs is plausible but not guaranteed. China has repeatedly used “administrative pauses” as geopolitical leverage; implementation could still shift based on U.S. actions in technology export controls or Taiwan policy.

Beyond the Headlines: The 12-Month Window

If this détente holds, it could stabilize rare earth magnet and oxide pricing short-term, allowing Western miners and refiners—from Australia to Texas—to accelerate investment without further panic. Yet it’s a temporary relief, not a resolution. China’s dominance remains intact, and any pause is a diplomatic inhale before the next strategic exhale.

REEx Summary

The Kuala Lumpur accord sketches a temporary truce between Washington and Beijing—tariffs paused, rare earth curbs delayed. If confirmed at the upcoming Trump–Xi summit, the deal could stabilize global supply chains for a year, buying time for the U.S. and allies to diversify production. Yet how much diversification can occur in a year? And still, beneath the smiles and soundbites, both sides are maneuvering for leverage in a long game over mineral power, and a broader unfolding geopolitical and economic power clash.

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