China to ease chip export ban in new trade deal, White House says

China will begin easing an export ban on automotive computer chips, essential to automobile production around the world, as part of a trade deal between the United States and China, the White House announced.

The White House confirmed details of the deal in a new fact sheet after Xi Jinping and Donald Trump met in South Korea this week.

The countries also reached agreements on exports of U.S. soybeans, the supply of rare earth minerals and materials used in the production of fentanyl.

The deal defuses a trade war between the world’s two largest economies after Trump imposed tariffs on China after taking office this year, leading to a series of retaliatory tariffs and global trade uncertainty.

The spokesperson for the Chinese embassy in Washington, Liu Pengyu, told the BBC in a statement that details of the agreements reached had been shared by “relevant authorities”.

“China-US economic and trade relations are mutually beneficial in nature,” he said.

“As President Xi Jinping has emphasized, trade relations should continue to serve as an anchor and driving force for China-US relations, not a stumbling block or point of friction.”

Speaking on Sunday after details of the deal were released, Treasury Secretary Scott Bessent told CNN: “We don’t want to separate from China… (But) they have proven to be an unreliable partner.”

Much of what is in Saturday’s fact sheet was announced by Trump and other officials following the meeting between the two leaders.

Trump called the negotiations held in South Korea “incredible,” while Beijing said they had reached consensus to resolve “major trade issues.”

One of the issues addressed in the agreement was the export of automotive computer chips. There were concerns that the lack of chips from Nexperia, which has production facilities in China, could create problems in the global supply chain.

Nexperia is a Chinese company, but based in the Netherlands. Around 70% of Nexperia chips manufactured in Europe are sent to China for completion and re-export to other countries.

The fact sheet states that China “will take appropriate measures to ensure the resumption of trade from Nexperia’s facilities in China, thereby allowing critical chip production to flow to the rest of the world.”

Beijing said on Saturday it was considering exempting some companies from the ban.

Last month, companies including Volvo Cars and Volkswagen warned that a shortage of chips could lead to temporary shutdowns of their factories, and Jaguar Land Rover said the lack of chips posed a threat to their business.

On other key issues, Beijing will now suspend for a year the export controls it introduced last month on rare earth minerals – essential for the production of cars, planes and weapons.

The White House also said it would reduce tariffs put in place to curb the importation of fentanyl into the United States, with China agreeing to take “significant steps” to address the issue.

Fentanyl is a synthetic drug made from a combination of chemicals, and although it is approved for medical use in the United States, this powerful and highly addictive substance has since become the leading drug responsible for opioid overdose deaths in the United States.

The chemicals used in its manufacture, some of which have legitimate uses, come mainly from China.

On soybeans, China has committed to buying 12 million metric tons of U.S. soybeans in the last two months of 2025, and 25 million metric tons in each of the following three years – roughly where they were before.

China’s decision to stop buying soybeans from the United States earlier this year deprived American farmers of access to their largest export market.

In response, Trump revived the farmer bailout that was in place during his first term.