2025-11-03 13:03:02

China will begin lifting its ban on the export of automotive computer chips following a trade agreement reached between Xi Jinping and Donald Trump, the White House has confirmed.

The deal, which also covers US soybean exports, rare earth minerals, and the chemicals used to produce the drug fentanyl, was announced after the two leaders met in South Korea last week.

Their agreement marks a major de-escalation in the ongoing trade war between the world’s two largest economies, which began after Trump, 79, imposed tariffs on Chinese goods earlier this year, prompting a wave of retaliatory measures from Beijing.

According to a White House fact sheet, China will “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”.

Nexperia, which is owned by a Chinese company but based in the Netherlands, produces semiconductors that are crucial to the global automotive industry.

Around 70 percent of the chips made in Europe are sent to China for completion before being re-exported.

Beijing said it was considering exemptions for certain companies affected by the ban.

Sigrid De Vries, director general of the European Automobile Manufacturers’ Association, told the BBC’s Today programme: “The Chinese authorities have said they would start exporting eligible chips again, that they’re investigating and making lists of companies… but the scope and the conditions are as yet unclear.”

She said easing the ban was positive news, adding: “Supply shortages were imminent,” but warned “they are still looming” due to earlier production interruptions.

Major carmakers including Volvo Cars, Volkswagen and Jaguar Land Rover have warned in recent months that the shortage of automotive chips could disrupt production and lead to temporary factory shutdowns.

A spokesperson for the Chinese Embassy in Washington told the BBC “competent authorities” had shared details of the agreements reached.

He added: “China–US economic and trade relations are mutually beneficial in nature.

“As President Xi Jinping noted, the business relationship should continue to serve as the anchor and driving force for China–US relations, not a stumbling block or a point of friction.”

US Treasury Secretary Scott Bessent told CNN: “We don’t want to decouple from China… (but) they’ve shown themselves to be an unreliable partner.”

Beijing has also agreed to suspend for one year its export controls on rare earth minerals, which are essential for manufacturing cars, aircraft and defence equipment.

The White House said the US would lower tariffs designed to curb the import of fentanyl, while China would take “significant measures” to restrict its production.

On agricultural trade, the agreement will see China purchase 12 million tonnes of US soybeans in the final two months of 2025, and 25 million tonnes annually for the following three years – restoring exports to previous levels.

Earlier this year, China halted purchases of American soybeans, cutting off US farmers from their largest export market.

In response, Trump reinstated a bailout programme to support agricultural producers affected by the dispute.

Visit Bang Premier (main website)