U.S. and China Reach Trade Deal as Beijing Eases Chip Export Ban
China will begin easing restrictions on exports of automotive computer chips critical to global car production, as part of a new trade deal reached with the United States, the White House announced.
Details of the agreement were released in a White House fact sheet following a meeting between Chinese President Xi Jinping and U.S. President Donald Trump in South Korea this week.
Along with the chip export decision, the two nations also agreed on measures involving U.S. soybean sales, the supply of rare earth minerals, and materials used to produce the drug fentanyl.
The deal marks a major step toward cooling tensions between the world’s two largest economies after months of escalating tariffs and uncertainty for global businesses.
A spokesperson for the Chinese Embassy in Washington said the agreements were confirmed by “competent authorities” and emphasized that trade relations between China and the U.S. are “mutually beneficial.”
“President Xi Jinping has said that economic ties should serve as the anchor and driving force for China-U.S. relations, not a source of friction,” the spokesperson added.
U.S. Treasury Secretary Scott Bessent told CNN on Sunday that while the U.S. does not seek to decouple from China, “they’ve shown themselves to be an unreliable partner.”
One key part of the deal involves easing China’s export ban on automotive computer chips made by Nexperia, a Chinese-owned company based in the Netherlands. Nexperia’s facilities in China produce chips used by major carmakers around the world.
The White House fact sheet said China would “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.”
European automakers welcomed the announcement but said details remain unclear.
“The Chinese authorities have said they will start exporting eligible chips again, but the scope and conditions are not yet known,” said Sigrid De Vries, head of the European Automobile Manufacturers’ Association.
She described the move as “positive news,” noting that shortages were imminent, though disruptions could still impact vehicle production and prices.
Several major automakers — including Volvo, Volkswagen, and Jaguar Land Rover — recently warned that chip shortages could cause temporary shutdowns at their plants.
China also agreed to pause for one year the export controls it introduced last month on rare earth minerals, essential for manufacturing cars, aircraft, and weapons.
In return, the U.S. will lower certain tariffs linked to efforts to curb the import of fentanyl, while China has agreed to take stronger action to control the flow of chemicals used to produce the drug.
On agriculture, China will resume purchases of American soybeans — pledging to buy 12 million tonnes in the final two months of 2025 and 25 million tonnes annually for the next three years, returning to pre-trade war levels.
China had halted U.S. soybean imports earlier this year, shutting off a key market for American farmers. In response, President Trump revived a bailout program to support the sector.
The White House described the new deal as “a meaningful step toward stabilizing trade relations” between the two countries.
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