WSJ What’s News: How China’s Rare-Earths Control Defined Tentative Trade Deal With U.S.

Release Date: June 11, 2025

Host: Alex Osola, The Wall Street Journal

US-China Trade Deal Hinges on Rare Earths Control

In the latest episode of WSJ’s What’s News, host Alex Osola delves into the critical elements shaping the tentative trade deal between the United States and China, with a particular focus on China’s strategic control over rare-earth magnets.

Rare Earths as a Lever in Trade Negotiations

Gavin Bade, an economic policy reporter for the Wall Street Journal, provides insightful analysis on the pivotal role rare-earth magnets played in reigniting US-China trade negotiations. Speaking at [00:38], Bade highlights, “With the U.S., I don't think there's a lot of clarity for businesses… they will have to be watching this issue going forward.” He elaborates that China’s decision earlier in the year to reduce exports of these essential components for several months was the catalyst for the expedited talks in London.

Details of the Tentative Trade Agreement

At [02:34], Bade explains the nuances of the newly brokered deal: “Basically, this is a non-tariff deal. All of the tariff stuff has stayed the same since Geneva… this deal brings us back to square one where we were in May.” The agreement primarily focuses on securing six months of rare earth magnet exports to the US, a move China likely views as temporary. Bade anticipates ongoing negotiations to ensure tariffs remain stable beyond the initial 90-day period, noting, “this is just the next chapter in this cycle that we see of escalation, de-escalation.”

Implications for US Industries

The scarcity of rare-earth magnets poses significant risks for various US industries, including automotive and defense sectors. Bade emphasizes the urgency for businesses to monitor the situation closely, stating, “the auto companies aren't going to have to shut down plants tomorrow, but certainly they're going to have to be watching this issue going forward” ([03:22]).

US Inflation Data and Federal Reserve’s Future Moves

Switching gears, the episode addresses the latest US inflation figures and their implications for the Federal Reserve’s monetary policy.

Inflation Trends and Economic Indicators

The Labor Department reported a 2.4% year-over-year increase in consumer prices for May, slightly up from April’s 2.3% ([04:25]). Core inflation, which excludes volatile food and energy prices, rose by 2.8%, remaining below economists' forecasts. Spencer Jacob, a WSJ investing columnist, discusses at [04:59], “no one expects them to do anything” regarding interest rate changes at the upcoming Fed meeting, given the stronger-than-expected economic data.

Political Pressures on the Fed

Jacob further comments on political influences, noting, “political pressure at the moment doesn't factor into their decision at all” ([05:39]). He explains that while President Trump has publicly urged the Fed to lower interest rates, the institution maintains its independence. However, Trump’s pressure could impact future appointments to the Fed’s leadership, potentially shaping long-term monetary policy.

Nationwide Protests Against Immigration Enforcement

The episode also covers the escalating protests against immigration enforcement across the United States and the government's response.

Deployment of National Guard in Texas

Texas Governor Greg Abbott announced the deployment of the National Guard in response to widespread anti-ICE (Immigration and Customs Enforcement) protests ([07:00]). This decision follows violent clashes in Austin, where protesters were met with tear gas and pepper spray near the state Capitol.

Home Depot's Role Amid the Protests

Sarah Nassauer, a WSJ reporter covering large retailers, sheds light on Home Depot's involvement. At [09:47], Nassauer explains, “This sort of symbiotic but somewhat contentious relationship has existed for decades between day laborers and Home Depot.” The company faces criticism for inadvertently becoming a focal point in the immigration enforcement crackdown, especially after ICE raids targeted stores in predominantly Latino neighborhoods.

Nassauer adds, “They are issuing some guidance to stores… if a worker doesn't feel comfortable sticking around for the day, they can leave and still be paid” ([09:49]). This policy aims to ensure the safety of employees while navigating the complex dynamics between the company and day laborers seeking work.

Other Notable Headlines

Elon Musk and President Trump’s Feud

Elon Musk has recently sought to de-escalate his public disagreements with President Trump. In a post on X ([11:20]), Musk expressed regret over his previous remarks about the president, stating, “they went too far.” Sources indicate that high-ranking officials, including Vice President J.D. Vance and White House Chief of Staff Susie Wiles, intervened to broker peace between the two figures.

Harvey Weinstein’s Retrial Verdict

In legal news, Harvey Weinstein was found guilty of one count of sexual assault and acquitted on another during his retrial in New York ([11:20]). This mixed verdict follows two trials and numerous allegations against the former Hollywood mogul, marking a significant moment in his long-standing legal battles.

Tennessee Lawsuit Against Education Funding Program

A federal lawsuit filed in Tennessee challenges a Department of Education program allegedly funneling funds to colleges with high Hispanic student populations. The state, represented by Students for Fair Admissions (SFFA), argues that the program is both racist and unconstitutional. Edward Bloom, president of SFFA, leads the charge against the US Department of Education, though no comment was available from the department at the time of reporting ([11:20]).

Conclusion

This episode of What’s News offers a comprehensive overview of the intricate US-China trade negotiations centered around rare-earth magnets, the current state of US inflation and its impact on Federal Reserve policies, and the nationwide response to immigration enforcement crackdowns. Additionally, it touches on significant legal and political developments, providing listeners with a well-rounded understanding of the key issues shaping today's headlines.

Produced by Anthony Banci and Pierre Bienname, with supervising producer Michael Cosmides, Alex Osola ensures that listeners are well-informed about the most pressing news stories affecting the global landscape.