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China’s new trade deal with the U.S. is providing some much needed optimism for the auto industry after years of supply-chain turbulence. The agreement lowers tariffs and eases China’s export restrictions on rare-earth elements- critical materials for electric motors, sensors, and batteries- but major uncertainties remain.
The pact, signed in late October, maintains a 10 percent reciprocal tariff on Chinese imports and promises broader access to rare-earth minerals such as lithium, graphite, and dysprosium. Yet automakers are still waiting for clear guidance from U.S. Customs on when and how those rates take effect.
Robert Khachatryan, CEO of Freight Right Global Logistics, which handles customs brokerage for auto clients, spoke on the blatant uncertainties that still cloud this new development,
“Until Customs issues direction, no one knows whether the new tariff date applies to shipments arriving, departing, or filed after November 10. ”
China’s role as the world’s primary source of rare-earth materials makes this deal particularly significant for automakers. Earlier this year, Beijing imposed strict licensing rules for exports of several elements used in EV magnets and batteries, rattling global manufacturers. The new agreement appears to suspend those measures, but the White House and Chinese government have offered conflicting explanations about which restrictions are actually lifted.
“An affordable, steady stream of these minerals has to be found for the long-term survival of this industry,” said Sam Fiorani, vice president at AutoForecast Solutions.
Adding to the confusion, Europe is negotiating its own “general license” with China, raising questions about whether U.S. suppliers will gain preferential access. Analysts warn that inconsistent trade terms could create regional imbalances in the EV supply chain.
Despite the uncertainty, automakers see potential relief ahead. If exports resume smoothly, production bottlenecks for electric drivetrains and advanced materials could ease heading into 2026. Still, industry leaders are reluctant to celebrate until the fine print becomes policy.
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