China is backing down from its rare earth mineral export restrictions in a surprise trade deal with President Trump. The White House announced Saturday that China will suspend the October controls on critical materials like gallium and germanium, reversing a policy that threatened to choke off supplies for everything from smartphones to electric vehicles. The move immediately halts Trump's planned 100% tariffs on Chinese goods.
The trade war just took an unexpected turn. China is rolling back its controversial rare earth mineral export restrictions in a deal that caught Washington and Wall Street off guard. The White House confirmed Saturday that Chinese President Xi Jinping agreed to suspend the October controls during a meeting with President Trump earlier this week.
The breakthrough resolves a standoff that was brewing into the tech industry's worst nightmare. China controls roughly 60% of global rare earth mining and 85% of processing capacity for materials that power everything from iPhone chips to Tesla batteries. When Beijing announced in October it would require export licenses for even small quantities of gallium, germanium, antimony, and graphite, it sparked panic across Silicon Valley boardrooms.
"We've been preparing contingency plans since the restrictions were first announced," one semiconductor executive told us on condition of anonymity. "The relief is palpable across the industry right now."
The timing couldn't be more critical. Global demand for rare earth elements is exploding as AI chips require increasingly sophisticated materials. Nvidia alone consumes millions of dollars worth of these minerals monthly for its H100 and upcoming Blackwell processors. Apple's iPhone 16 production was already facing potential delays before this deal materialized.
China's October restrictions built on earlier controls from April 2025 and October 2022, creating what industry analysts called a "slow-motion supply chain strangulation." The policy required foreign companies to navigate Byzantine licensing processes that could take months, effectively giving Beijing veto power over global tech production schedules.
Trump's response was characteristically aggressive. The administration threatened 100% tariffs on all Chinese goods if the restrictions weren't reversed, escalating what was already the most serious trade confrontation since the Smoot-Hawley era. Those tariffs would've added roughly $400 billion annually to consumer costs, according to Peterson Institute estimates.
