This article is by Yi Woo-lim and read by an artificial voice.

The United States and China reached a fragile truce over rare earth supplies on Thursday, easing a dispute that had threatened to upend global technology production and rattled markets from Seoul to Silicon Valley.

While no formal agreement has yet been released, Korea's semiconductor and home appliance sectors - previously caught in the crossfire of China's export controls - welcomed the development as a temporary reprieve.

During the one-hour-and-forty-minute meeting between U.S. President Donald Trump and Chinese President Xi Jinping in Busan, both sides agreed that Beijing would suspend rare earth export restrictions for one year, while Washington would lower tariffs on fentanyl-related imports from 20 percent to 10 percent.

"All of the rare earth has been settled," Trump said aboard Air Force One on his return to Washington.

"You could say this was a worldwide situation, not just a U.S. situation. There is no roadblock at all on rare earth. That will hopefully disappear from our vocabulary for a little while," he added.

'Welcome news' for Korea's chip sector

Korea's high-tech manufacturers - especially in the semiconductor industry - expressed relief. Rare earth elements are used in semiconductor fabrication, and recent uncertainty in supply chains had raised alarm.

One chip industry official said the deal was "clearly welcome news for the sector, as it reduces overall supply chain risks."

The relief followed months of anxiety after China's Ministry of Commerce tightened export controls on rare earths on Oct. 9, targeting advanced chip technologies. The measures required individual export reviews for rare earths used in sub-14-nanometer system semiconductors and memory chips with 256 or more layers, as well as related production and testing equipment.

Foreign media outlets had warned that the restrictions could delay production of Samsung Electronics' ninth-generation V-NAND chips, Nvidia's H100 AI processors and Apple's A18 Pro chips by one or two quarters.

The agreement is also expected to ease concerns for semiconductor equipment suppliers. ASML, the world's sole supplier of extreme ultraviolet (EUV) lithography machines, had faced delivery delays amid China's export controls. The one-year suspension should relieve those pressures.

Because Samsung Electronics, TSMC and Intel all rely on ASML equipment, analysts say the decision will help stabilize global chip production schedules.

Cautious optimism from home appliance makers

The home appliance industry also saw the summit as "a positive signal." Rare earths are used not only in chips but also in permanent magnets for washing machine and refrigerator motors as well as in phosphors for display panels.

A domestic appliance company official noted that while the amount of rare earths used in appliances is "relatively small," China's message earlier this month that "even trace amounts could trigger sanctions" had caused unease.

"If the United States and China reached an understanding, our supply risks are reduced as well," the official said.

Still, some companies remain cautious. The Chinese government has not yet officially clarified the details of its commitment, and it remains to be seen whether the agreement will be fully implemented.

Xi told Trump during their meeting that the two sides should "think big" and recognize the long-term benefit of cooperation, and not fall into a "vicious cycle of mutual retaliation," according to Xinhua News Agency.

He emphasized that Beijing was willing to continue dialogue "in the spirit of equality, mutual respect and mutual benefit" to "continuously shorten the list of problems and lengthen the list of cooperation."

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