U.S.-China Framework To Implement Trade Deal Will Only Temporarily Ease Tensions

(PATRICK T. FALLON/AFP via Getty Images)

Cargo shipping containers are seen stacked at the Port of Los Angeles in San Pedro, California, on April 15, 2025.

As part of the new framework reached to implement its May 12 trade deal with China, the United States might ease or pause technology restrictions on the country, but it will eventually expand them again, potentially causing China to restrict its rare earth exports and/or other critical raw materials once more. On June 10, U.S. and Chinese negotiators reached an agreement on a framework to implement their May 12 trade deal that saw both sides scale back the sweeping tariffs they had implemented against each other in early April. No details about the framework have yet been released, and both countries' leaders still need to approve the deal. However, in a Truth Social post on June 11, U.S. President Donald Trump said students from China would be allowed to continue studying in the United States, appearing to walk back plans announced on May 28 to "aggressively revoke" visas for Chinese students. Trump also said that Chinese rare earth minerals and related magnets would be "supplied." Washington's priority in talks was easing China's April 4 export restrictions on rare earth elements and related magnets that have since disrupted supply chains across the automotive industry, which is highly dependent on the rare earth magnets China had been restricting. Beijing's priority in talks, meanwhile, was easing the restrictions that the Trump administration has recently imposed against China's technology sector and Chinese students studying in the United States. U.S. concessions on technology restrictions were thus likely also included in the new framework agreement, though no formal announcement regarding them has been made.

As a part of the May 12 deal, China agreed to "adopt all necessary administrative measures to suspend or remove the non-tariff countermeasures taken against the United States since April 2, 2025," which Washington appears to have interpreted as allowing rare earth exports to be allowed uninterrupted.
On April 4, China placed export licensing requirements on seven rare earth elements and related magnets after the United States announced plans on April 2 to impose sweeping new tariffs on China. Since then, China has approved far fewer exports of these rare earth magnets, creating shortages that have hit global automakers particularly hard, although in the days leading up to the June 9 start of talks, China began accelerating the approval of rare earth exports.

As part of the new framework, the United States likely agreed to roll back some technology restrictions on China and potentially halt new ones, marking a significant departure from its previous policy of excluding such measures from negotiations. Since the signing of the May 12 trade agreement, the United States has taken several new actions against China's technology sector. The Trump administration has issued warnings to foreign companies about buying certain semiconductor chips from the Chinese tech giant Huawei, due to concerns that they were made with U.S. technology. It has also ordered companies to stop exporting electronics design automation software, machine tools, and nuclear power plant parts to China — all areas where the Asian country is highly dependent on foreign technology. Beijing has lamented these restrictions, claiming they violate the trade agreement it reached with Washington. Against this backdrop, Trump reportedly authorized U.S. negotiators to offer concessions on these restrictions in an effort to ease the rare earth magnet shortage caused by the licensing requirements China imposed on April 4. While no public announcement regarding such concessions has been made, this indicates the Trump administration likely agreed to reverse some, if not all, of the technology restrictions it has imposed since May 12, in exchange for China approving more rare earth exports. While the White House likely did not agree to fully stop placing new technology restrictions on China, it probably also promised to limit the scope of any future restrictions. This likely included pledges to limit new restrictions on semiconductors to only the most advanced chips. The Trump administration may have also agreed to slow down its singling out of specific Chinese companies for technology restrictions and not widen the scope of technologies targeted in future restrictions beyond semiconductors, AI and other sectors already targeted. If confirmed, should the final framework ever be unveiled, the Trump administration's willingness to offer such concessions would mark a notable shift in U.S. policy, as Washington has historically kept issues that it deems legitimate national security concerns (like China's access to advanced chipmaking technology) outside the scope of trade talks, regarding them as non-negotiable. With technology restrictions now apparently up for discussion, the White House is setting a precedent that will, in turn, incentivize China to press the matter further in future talks.

The U.S. delegation sent to conduct the talks with China was led by Commerce Secretary Scott Bessent, whose department oversees technology restrictions related to national security concerns.
Prior to the recent U.S.-China talks, the director of the White House National Economic Council, Kevin Hassett, said the United States would offer concessions on exporting some semiconductor technologies to China, but not highly advanced chips, referring to those made by the U.S. semiconductor company Nvidia.
Current levels of U.S. tariffs on China are unlikely to cause a significant economic crisis in the country, as Beijing can, for now, manage the subsequent trade disruptions with fiscal buffers. As such, China's priority in trade talks appears to have shifted away from tariff-related issues to technology restrictions, which have a much more significant impact on China's economic growth and innovation than tariffs in the long run.
China's recent slow walking of license approvals for rare earth shipments appears to be partially aimed at showcasing the leverage it has over the United States (and the West more broadly) through its control of the market and related magnets, with China supplying around 90% of the world's rare earth magnets. Magnets made with rare earth elements, such as scandium, terbium and dysprosium (all of which are subject to China's April 4 export licensing restrictions), retain their magnetism when exposed to high temperatures. This makes them crucial for green technologies, the electronics sector, the automotive industry, and the aerospace and defense sectors — thereby providing China with a key pressure point to exert against the United States to extract concessions.

Regardless of any short-term concessions to China, the United States is still likely to eventually expand the scope of its technology restrictions, which prompt China to retaliate by again restricting rare earth exports. For domestic political reasons, Trump may view that his May 12 trade deal with China is a big enough win that he can limit technology restrictions on the country without angering his supporters. However, China hawks dominate his administration and the U.S. government more broadly. And many of these policymakers — including Secretary of State Marco Rubio, as well as most Republicans in Congress — view China as a revisionist power seeking to usurp the United States' global technological and political dominance. They will thus likely keep calling for more aggressive restrictions on Chinese technology, including those that target other critical emerging technologies beyond semiconductors (such as biotechnology) and those that limit the use of certain Chinese technology in U.S. supply chains. Whether as a result of an act of Congress or pressure from within the Trump administration, this means the United States will likely eventually place restrictions on China that, from Beijing's perspective, either directly violate the June 10 framework agreement or are so significant that the framework is no longer tenable. And because the Trump administration has demonstrated a willingness to concede on national security-related technology issues, China will be even more incentivized to respond to such restrictions by again curbing its exports of crucial rare earth elements — particularly over the next couple of years, when alternatives to Chinese rare earths remain under development and not at full capacity. Moreover, even in the intervening period, Beijing likely has an incentive to cap exports to most companies in an effort to limit their ability to stockpile rare earths and protect against a future Chinese cutoff in supplies. Nevertheless, companies and foreign governments will, at least for now, be able to resume receiving Chinese rare earth shipments over the coming weeks and months. And, if they can receive approvals for larger volumes, companies will also try to increase stockpiling to withstand any future disruptions.