The escalating tensions between the United States and China, the world’s largest economic powers, have now reached a conclusion—parting ways after a devastating economic conflict. The resolution came after two days of tense discussions, bringing about changes in rare earth mineral exports and foreign student exchanges between the two nations.
These minerals are essential for producing smartphones, electric vehicles, satellites, and advanced weapons systems. Despite its leadership in innovation, the U.S. remains vulnerable, with China controlling over 60% of rare earth mineral production and nearly 90% of global refining capacity.
In 2025, the Trump administration introduced huge tariffs on all imports, with China retaliating accordingly. This trade friction created a deeper strategic decoupling, with both nations raising their import tariffs to as high as 145% and 125% for a brief period. Both nations raced to fortify their own supply chains while destabilizing each other's access to critical materials.
During this period, many multinational companies adopted a “China-plus-one” model, looking to diversify production and sourcing by including other countries—making it a golden opportunity for India to rise as a potential alternative in the mineral and manufacturing value chain.
However, in the early hours of Wednesday, officials from both countries reached an agreement, with China resuming its rare earth mineral exports and manufacturing for the United States, and the U.S. lifting restrictions on Chinese student visas—encouraging cultural and educational ties between the nations. Both countries are also expected to reduce their tariffs for each other by 115%, while retaining an additional 10% tariff. These changes are valid and licensed for a limited period of time.
This raises questions about the new American tariffs and the stability of global supply chains, with the future of both countries becoming uncertain. The deal now preserves strategic decoupling—tariffs remain relatively high, but trade disruption is eased through the use of soft diplomatic tools, allowing the exchange of rare earth exports and educational access, which are not just mere economic exchanges. The deal is expected to significantly increase trade flows between the two states while tariffs remain low, and it may also lead to accelerated transportation to meet the 90-day deadline.
Does India still stand a chance to rise as a potential alternative? Yes, India’s opportunity lies in its geography and its growing alignment with Western strategic goals. However, in a country like India, rising to this level is a challenge, as it lacks adequate refining and processing infrastructure, with bureaucratic delays, environmental regulations, and technological gaps further slowing progress. The truce between the U.S. and China increases the stakes for India by reducing short-term competition to manufacture essentials while providing it space and time to improve its technology and infrastructure.
In this fluid and competitive landscape, India’s future hinges on its ability to balance opportunity with capacity. Close geopolitical monitoring is needed to identify dynamic global changes—including uncertain trade license renewals by either country or any shifts in tariffs. The U.S.–China conflict or resolution over critical minerals is not just a bilateral situation—it has ramifications for global energy, defense, and technological development. India has the resources, the diplomatic goodwill, and a fast-modernizing economy to play a central role in this new world order. A U.S.–China truce may slow India’s momentum—but deeper decoupling, allied trade frameworks, and the green tech push could sustain opportunity.
Riya Goyal is a trainee journalist at Cult Current. The views expressed in the article are
her ownand do not necessarily reflect the official stance of Cult Current