Secretary of Commence Howard Lutnick revealed to Bloomberg yesterday that the US has finished a trade deal with China and that it has been signed and sealed. Lutnick's comments came after Trump announced the deal earlier, with Bloomberg quoting Lutnick as saying that China was going to deliver rare earth metals to the US in return for "countermeasure" removal from America's end. Whether this also includes semiconductors is uncertain, with chips being a major pain point for the Chinese in their trade negotiations with the US.
US-China Trade Deal Is Finalized, Says Lutnick
Speaking to Bloomberg, Lutnick commented that "the China deal, we inked the deal you remember we had a trip to Geneva. And then that was being slow played. We got back together at London and that deal was signed and sealed two days ago. President just said it."
He added that an agreement with India was also on the cards and stated that "the way these deals happen is, their prime minister and their parliament have to approve it. And the President likes to close these deals himself. . . the President's gonna make his calls, he's gonna decide exactly his finishing touches on them."
In a separate quote, Bloomberg quoted the Commerce Secretary commenting, "They're [China] going to deliver rare earths to us," and after China delivers the rare earths, "we'll take down our countermeasures." Whether these countermeasures also include restrictions placed on the sale of advanced semiconductors to China is uncertain, and Lutnick could be referring to the tariffs placed on Chinese imports by Trump.
In a separate report, Reuters quoted the White House as saying that the US and China had reached an understanding about the resumption of rare earth mineral supplies from China. The understanding between the two was about how China could expedite rare earth shipments to the US, said the official, without mentioning any reciprocal measures the US had agreed to.
Rare earth minerals have been a central issue in the trade talks between the US and China. China controls most of the minerals' global supply, and after it suspended shipments to the US, automotive, defense and consumer electronics supply chains were at risk of disruption. However, after the latest announcements, shares of American rare earth mineral firms such as MP Materials lost 2.6% in pre-market trading after gaining 73% in June alone.
Like China's rare earths, the US has a monopoly on advanced AI chips courtesy of NVIDIA and, to a lesser extent, AMD. The two companies are the top AI chip designers in the world, which allows the US to restrict their sales to any country deemed to compromise American national security. Whether AI GPUs and other chips were also part of the concessions the two sides agreed to is unclear, with NVIDIA's shares remaining flat while AMD gained a modest 1% in pre-market trading. AMD's shares have gained 30% in June, driven by factors including a potential business expansion in China.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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