US-China Reach Historic One-Year Rare Earths Agreement as Trump-Xi Summit Exceeds Expectations

US President Donald Trump with Chinese President Xi Jinping.

US President Donald Trump announced Thursday that he and Chinese President Xi Jinping have reached a one-year agreement regarding the supply of critical rare earth materials.

During their first face-to-face meeting in six years, Trump also confirmed he would reduce fentanyl-related tariffs on Chinese goods to 10 percent, amid ongoing trade tensions between the two economic powers.

"All the rare earths has been settled, and that's for the world," Trump informed reporters while aboard Air Force One. He clarified that the arrangement would last for one year, with annual renegotiations to follow.

When describing his meeting with President Xi, Trump expressed exceptional satisfaction: "We are going to issue a statement with some of the details but overall I guess on the scale of 0 - 10 with 10 being the best, the meeting was a 12."

The US President also outlined future diplomatic exchanges, stating: "I'll be going to China in April and he'll be coming here sometime after that, whether it's in Florida, Palm Beach or Washington, DC."

Trump indicated that numerous issues were resolved during their talks and described Xi as a "tremendous leader of a very powerful country."

The meeting comes after escalating tensions between the two nations following a September phone call, with both sides accusing each other of increasing hostilities in the weeks leading up to this anticipated meeting.

Rare earth materials, a strategic sector dominated by China and essential for manufacturing in defense, automotive, and consumer electronics industries, were expected to be a central topic of discussion.

Beijing had recently implemented comprehensive export controls on these materials and related technology. In response, Trump had announced retaliatory tariffs of 100 percent on all Chinese imports, initially scheduled to take effect on Saturday.

This exchange threatened to initiate another cycle of escalating trade conflicts between the world's two largest economies.

Trump subsequently moderated his position, acknowledging that such high tariff levels were "not sustainable" and expressing confidence that an agreement on rare earths could be achieved.

A 20 percent tariff on Chinese products related to Beijing's handling of the fentanyl issue has been in effect since March. Trump had previously claimed that China was not doing enough to stop the trafficking of fentanyl and other potent opioids into the United States.

However, Beijing has maintained that it has cooperated with Washington on this issue and that tariffs would not effectively address the drug problem.