Apple and Nvidia Secure Critical Supplies as US Strikes Rare Earth Deal with China
- tech360.tv
- Jul 16, 2025
- 3 min read
American technology giants Apple and Nvidia have both secured access to crucial materials following a significant US government trade agreement that has helped resolve the rare earth supply crisis that threatened to cripple the tech industry.
The breakthrough comes after months of tense negotiations between Washington and Beijing, culminating in a comprehensive deal that has allowed both companies to resume critical operations. Apple announced a USD$500 million agreement with Pentagon-backed MP Materials for rare earth magnets, whilst Nvidia received approval to resume sales of its H20 AI chips to China as part of the same trade package.
In an interview with Reuters, Commerce Secretary Howard Lutnick confirmed that Nvidia's chip sales resumption was directly linked to the broader rare earth negotiations. According to Reuters, Lutnick stated: "We put that in the trade deal with the magnets," referring to the agreement that restarted rare earth shipments to US manufacturers. The crisis began in March when China halted rare earth exports following escalating trade tensions with the Trump administration. The move had devastating consequences across American industry, with Ford Motor and Suzuki Motor forced to idle production lines, whilst Elon Musk reported shortages affecting his robotics business. For tech companies like Apple and Nvidia, the implications were particularly severe given their reliance on rare earth materials for manufacturing.
Apple's deal with MP Materials provides the iPhone maker with a steady supply of rare earth magnets essential for hundreds of millions of devices including phones, watches, and earbuds. The magnets will be produced at MP's Fort Worth, Texas facility using recycled materials from the company's Mountain Pass, California mining complex, with deliveries beginning in 2027. Meanwhile, Nvidia's ability to resume H20 chip sales to China addresses a different but equally critical challenge. The company had estimated that previous export restrictions would cost $15 billion in revenue, making Chinese market access vital for maintaining its position as the world's most valuable firm. The H20 chips, whilst less powerful than Nvidia's standard offerings, remain compatible with the company's software tools that have become the industry standard.
The US government's strategy proved particularly effective because it addressed both companies' needs simultaneously. By securing rare earth supplies for domestic production whilst opening Chinese markets for American exports, Washington created a mutually beneficial arrangement that strengthened both sides of the trade equation.
The Pentagon's USD$500 million investment in MP Materials last week, making the government the company's largest shareholder, provided crucial backing for the rare earth supply chain. This government ownership gave negotiators significant leverage whilst ensuring long-term supply security for American manufacturers.
For Apple, the MP Materials partnership represents part of its broader four-year investment commitment to the United States. The deal supports dozens of new manufacturing and research positions across Texas and California.
Nvidia's restored access to the Chinese market has triggered a scramble among Chinese companies to secure H20 chips. ByteDance and Tencent are reportedly submitting applications for chip purchases, with Nvidia maintaining an approved list system for potential buyers. The company's CEO, Jensen Huang, who is currently visiting Beijing, has argued that maintaining Chinese market access is essential for preventing competitors like Huawei from gaining ground.
The rare earth supply crisis had stress America's dangerous dependence on Chinese materials. These rare metals are essential for manufacturing magnets that convert power into motion, used in everything from mobile phone vibration mechanisms to electric vehicles and weapons systems.
China's market dominance had left American companies vulnerable to supply disruptions for political reasons. Recent developments suggest the trade talks conducted in Geneva and London over the past two months have yielded concrete results. China has resumed rare earth shipments, with exports surging in June, whilst the Trump administration has selectively relaxed technology export restrictions. This reciprocal approach has created momentum for further cooperation.
The US government successfully negotiated a comprehensive deal linking Apple's rare earth magnet supply agreement with Nvidia's restored access to Chinese markets, demonstrating effective leverage in trade negotiations.
Apple's deal through Pentagon-backed MP Materials eliminates Chinese supply chain dependence for critical rare earth magnets, whilst government investment provides long-term stability for domestic production.
Nvidia's resumed H20 chip sales to China with Commerce Secretary Howard Lutnick confirming this formed part of the broader rare earth trade package.
The agreement addresses supply chain vulnerabilities that had forced automotive manufacturers to idle production and threatened multiple technology sectors dependent on rare earth materials.
