US and China reach tariff agreement to end rare earths shipments and restrictions

The United States and China have formalized a trade understanding reached last month in Geneva that includes Beijing's commitment to resume exports of rare earth minerals, US Commerce Secretary Howard Lutnick announced.

According to Lutnick, the agreement was signed two days ago and enshrines the terms negotiated between Washington and Beijing throughout this year, after successive mutual accusations of violating previous agreements. "They will deliver rare earths to us and, when they do, we will lift our countermeasures," he said in an interview with Bloomberg.

Siemens AG, one of the world's leading suppliers of semiconductor design software, has been exempted by the US Commerce Department from the need to apply for licenses to operate in the Chinese market, the German company said in a statement.

The export restrictions had been imposed in May as part of a package of measures adopted by the United States in response to Chinese restrictions on the export of rare earth minerals.

Siemens confirmed it has restored full access to its software and technology for Chinese customers . The world’s two other leading electronic design automation (EDA) software companies — Cadence Design Systems Inc. and Synopsys Inc. — did not immediately respond to requests for comment on whether they had received similar communications, Bloomberg reported. The U.S. Commerce Department also declined to comment, the agency added.

Rare earths are crucial materials used in the production of wind turbines, aircraft, semiconductors and advanced technology. Under the trade deal reached last week, Washington agreed to allow shipments to China of chip design software, ethane and jet engines , provided Beijing follows through on a promise to speed up approvals for exports of the critical minerals.

A White House official confirmed that the two countries had agreed on the terms needed to implement the Geneva accord. China's embassy in Washington declined to comment, while China's foreign ministry did not immediately respond.

The signing of the agreement generated optimism in the markets: Asian stock indexes and European futures advanced, and a global stock index reached a new all-time high.

Lutnick said US President Donald Trump plans to conclude a series of ten trade agreements with major US partners by July 9. "We'll finalize the ten major agreements, organize them by category, and the remaining countries will follow suit after that ," he said.

While he did not specify which countries were involved, Trump suggested on Monday that the US was close to an agreement with India. Japan's top negotiator, Ryosei Akazawa, is also scheduled to meet in the US capital, and has reiterated that Japan "cannot accept" 25% tariffs on autos.

Trump has already stated that, in the absence of agreements by July 9, he will send "letters" to each country with the proposed terms, applying unilateral tariffs - the so-called "reciprocal tariffs", which could reach up to 50%. Most of these measures were announced on April 2, but suspended for 90 days to allow negotiations.

The full scope of the agreements remains unclear, given that trade pacts typically require years of negotiation. A previous deal with the U.K., for example, remains with outstanding issues, including tariffs on imported metals.

The agreement now reached with China does not address more sensitive issues, such as fentanyl trafficking or full access for US companies to the Chinese market.

The first round of negotiations in Geneva resulted in a tariff reduction by both sides, but was quickly followed by mutual accusations of non-compliance. After further talks in London this month, negotiators announced an understanding, subject to approval by Trump and Chinese President Xi Jinping.

According to Lutnick, the lifting of US countermeasures depends on the actual arrival of rare earths. This week, the US Department of Commerce authorized the shipment of ethane to China, although its unloading remains subject to specific authorization.