A trade agreement has been announced by the White House following a meeting between President Donald Trump and President Xi Jinping in South Korea. The agreement includes China easing an export ban on automotive computer chips, commitments on US soybean purchases, and agreements concerning rare earth minerals and fentanyl materials. This development occurs in the context of previous tariffs imposed by the US and retaliatory tariffs from China.
Automotive Chip Exports
China will begin easing an export ban on automotive computer chips, according to the White House. The deal addresses concerns that a lack of chips, particularly from Nexperia, could create global supply chain issues for car manufacturers.
Nexperia, a Chinese-owned company based in the Netherlands, ships approximately 70% of its European-made chips to China for completion and subsequent re-export. A fact sheet confirms that China will "take appropriate measures to ensure the resumption of trade from Nexperia's facilities in China, allowing production of critical legacy chips to flow to the rest of the world."
Prior to this agreement, Beijing had indicated it was considering exempting some firms from the ban. In the preceding month, Volvo Cars, Volkswagen, and Jaguar Land Rover had issued warnings regarding potential temporary plant shutdowns and business threats due to chip shortages.
Rare Earth Minerals
Beijing will pause export controls on rare earth minerals for a period of one year. These minerals are used in the production of items such as cars, planes, and weapons.
Fentanyl and Tariffs
The White House stated it would lower tariffs previously implemented to reduce the import of fentanyl into the US. China, in turn, has agreed to "take significant measures" to address the issue of fentanyl.
Agricultural Trade
China has committed to purchasing 12 million tonnes of US soybeans during the final two months of 2025, followed by 25 million metric tonnes annually for the subsequent three years.
Context of the Agreement
The details of the deal were confirmed by the White House in a fact sheet following the meeting between President Xi Jinping and President Donald Trump. While much of the fact sheet's content had been previously announced by US officials, Beijing had not immediately released details, stating that a consensus had been reached to resolve "major trade issues." President Trump had characterized the discussions as "amazing."