- United States and China reached several agreements on agricultural and energy products, along with efforts to control fentanyl exports.
- China agreed to resume exports of rare earth elements, critical minerals, and magnets to the U.S.
- 12 million tons of soybeans from the U.S. will be purchased by China during the current harvest season, ending in January.
- China committed to buying at least 25 million tons of soybeans annually from the U.S. for the next three years.
- The trade agreement could be signed as early as next week, according to Treasury Secretary Scott Bessent.
A series of agreements were reached between the United States and China following a meeting between President Donald Trump and President Xi Jinping in South Korea. The discussions resulted in commitments involving agricultural exports, energy products, and the regulation of fentanyl shipments.
Officials stated that China will immediately resume exports of rare earth elements, critical minerals, and magnets — materials essential for advanced manufacturing and electronics. According to President Trump, these resources are important for U.S. industry and national security.
Treasury Secretary Scott Bessent said that the two sides completed the “Kuala Lumpur agreement” recently, and that signatures on the formal trade deal could come as soon as next week. In a Fox Business interview, Bessent noted that President Trump made rare earth supply a focus since taking office in January, describing U.S. reliance on Chinese processing as a strategic weakness.
“The Chinese control about 70% of the mining, but more importantly, they control about 90% of the processing and refining,” Bessent stated. To address this, Bessent explained that the administration has worked to build domestic facilities for refining and processing rare earths, aiming to secure a more reliable supply chain for U.S. industries.
On agricultural trade, Bessent confirmed that China will purchase 12 million tons of U.S. soybeans during the current season, which runs through January. Furthermore, China has committed to buying at least 25 million tons of soybeans each year for the next three years. While this is slightly lower than 2024’s 27 million tons, Bessent said he expects actual purchases to exceed these minimums.
Stock market reactions were mixed during Thursday’s opening, with the S&P 500 and Nasdaq-related ETFs showing declines, while the Dow Jones index ETF gained modestly. Retail sentiment indicators for major index funds remained neutral at the time these agreements were announced.
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