Global Economy — 2026-05-07

Trump-Xi Trade Truce Includes China Pausing Rare Earth Export Curbs and Resuming Soybean Purchases

Following the Busan summit on May 6, Trump and Xi agreed to a trade truce under which Washington will reduce tariffs while Beijing pauses rare earth export curbs, resumes US soybean purchases, and cooperates against illicit fentanyl trade, US News reported. China had imposed the rare earth processing export restrictions during the spring tariff escalation, targeting materials used across the US defense and technology supply chain.

Analysis
The Busan framework secured a pause, not a resumption, leaving Beijing's rare earth processing leverage intact while extracting immediate US tariff concessions, per a single US News report, uncorroborated. Full Chinese resumption of rare earth exports within 60 days of the summit truce is unlikely: Beijing holds dominant processing capacity, a formal resumption would surrender its principal point of leverage before any reciprocal US commitment has materialized, and Washington has no verified enforcement mechanism to compel it. The near-term supply chain relief is real but reversible at Beijing's discretion. The concessions more plausibly reflect a tactical play to bank tariff relief ahead of enforcement than any structural shift in China's willingness to decouple rare earth supply from diplomatic coercion.

1 sources

U.S. President Trump's Renewed Trade War With China - Reuters (via US News)