Trump says he has reached a deal with China on trade and rare earth minerals

US President says teams from both countries will meet to discuss outstanding trade issues

President Donald Trump held a phone call with Chinese leader Xi Jinping, during which the two discussed trade and a dispute over rare earth minerals. AFP

President Donald Trump said he and Chinese leader Xi Jinping held a "very positive" phone call on Thursday, with the two agreeing to a trade deal and further talks to break an impasse over tariffs and global supplies of rare earth minerals.

In a post on his Truth Social platform, Mr Trump said the call lasted about 90 minutes and said he and Mr Xi invited each other to their respective countries.

"There should no longer be any questions respecting the complexity of Rare Earth products," Mr Trump wrote. "Our respective teams will be meeting shortly at a location to be determined."

"We have a deal with China," Mr Trump later said from the Oval Office during a meeting with the German Chancellor Friedrich Merz. "We were straightening out some of the points, having to do mostly with rare earth, magnets and some other things."

The keenly awaited call comes amid a dispute over rare earth minerals, which are vital for use in batteries and other tech products. The problem has threatened the already fragile trade truce reached last month.

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"The US side should take a realistic view of the progress made and withdraw the negative measures imposed on China," the Chinese government said in its own readout of the call. "The two sides should make good use of the established trade and economic consultation mechanism, uphold an attitude of equality, respect each other’s concerns, and strive for a win-win outcome."

On May 12, Washington and Beijing reached a 90-day deal that rolled back some of the tit-for-tat tariffs that the world's two largest economies had placed on each other, threatening to disrupt global trade. Though the move stabilised the stock market, it did not address the issue of the rare earth minerals.

In April, China suspended exports of a wide range of critical minerals and magnets in a move that disrupted supplies used for the manufacture of vehicles, computer chips and other vital commodities.

During the Oval meeting on Thursday, Mr Trump also appeared to go back on a State Department announcement last week that the US would begin to revoke the visas of Chinese students. "Chinese students are coming, no problem, no problem," Mr Trump said. "It's our honour to have them. Frankly we want to have foreign students, but we want them to be checked."

The measure came amid an intense stand-off between the Trump administration and private universities over how institutions of higher education are to handle curriculums, faculty hiring, free speech and on-campus protests. China has the second highest number of international students in the US.