Pre-written event brief — US-China rare-earth deal (two-way switch)

Status: PREPARED IN ADVANCE, publish-on-trigger. Drafted 2026-07-05 while the deal sits at awaiting-signature / likelihood HIGH in ops/queue/upcoming.md. Both scenarios below are pre-written so the case study ships within hours — not days — of the trigger firing. Research, not investment advice. Tickers require the audit_listing verification gate before surface use.

The event

Trump-Xi framework (June 5 2026 call; June 11 "deal done, subject to final approval"): China to supply "full magnets, and any necessary rare earths, up front" to the US — which, if enacted, suspends or eases the Apr-2025 REE licensing regime (register: 2025-04-04-china-mofcom-heavy-rare-earths-export-licensing, seven heavy/medium REEs incl. Dy/Tb, NdFeB + SmCo magnets) for US-bound shipments. As of 2026-06-15 the Apr-2025 controls remain formally active — the deal is political, not yet a MOFCOM instrument.

Triggers (from the queue's promote-when, verbatim intent):

• T-A (easing fires): MOFCOM publishes a formal Announcement suspending/

easing the Apr-2025 licensing for US-bound shipments, OR a signed bilateral text on whitehouse.gov / Xinhua.

• T-B (deal collapses): talks break down publicly, a new US escalation

(tariff snap-back, entity listings) draws Chinese REE retaliation, or the Apr-2025 regime is TIGHTENED instead.

Evidence base (why the sign flips)

Directional study (EVENT_STUDY_DIRECTIONAL.md): the two Nov-2025 suspension announcements (70/72, post-truce) produced producer−consumer spreads of −3.0% and −7.3% at t+20 — ex-China scarcity names FALL on easing, 2/2. Small n, but sign-consistent and mechanism-obvious: these equities embed a China-supply-risk premium that the détente drains.

Scenario A — deal signs (MOFCOM suspension published)

Expected: ex-China REE pure-plays de-rate; magnitude scaled by (i) pure-play intensity, (ii) ABSENCE of non-market revenue insulation.

Consumer/relief side: magnet-using OEMs (autos, drones, defense) — relief is real but P&L-immaterial per channel-4 discipline; expect headlines, not durable moves. The tradable leg is the pure-play SHORT side.

Already-priced check (critical honesty): the political deal has been public since June 11 — a chunk of Scenario A is in prices. The tradable residual is the gap between "political statement" and "formal MOFCOM instrument" — the same gap our axis-2 enactment-vs-expectation thesis targets. Measure the June 11-13 moves in the names above BEFORE claiming any residual (do this at trigger time with the price cache).

Sequel (Ch.5): if US-bound flows normalize, the NEXT restriction risk rotates to EU/Japan-bound flows (the Jan-2026 Japan dual-use action shows the template) — watch European magnet consumers, not US ones.

Scenario B — deal collapses / controls tighten

Mirror image, with asymmetries:

• Longs: the same pure-play list, PLUS the Apr-2025 winners that showed the

biggest sensitivity (register tape: heavy-REE licensing event producers +4.2% t+20). MP participates fully on this side (entity listing + floor = pure upside optionality).

• Amplifier: a collapse AFTER a priced-in deal produces a two-legged move

(unwind of détente pricing + new scarcity premium) — historically the larger-magnitude direction (cf. Oct-2025 extraterritorial controls, the most violent week in the register tape).

• Domicile trap: Neo (Zibo) flips to loser; any Western magnet maker

dependent on Chinese alloy/feed (check dossier material_exposures at trigger time).

Execution notes (for the case-study-on-trigger)

1. At trigger, run the price snapshot day-1/day-5 for every name above (price cache + Yahoo), splice into this brief, publish within 48h — that IS the product artifact the per-event lane sells. 2. Exit signature to watch (validated pattern): pure-plays announcing equity raises into a Scenario-B pop = cycle-end marker. 3. Dossier gaps: mp-materials, lynas, ucore, aclara, energy-fuels queued for onboarding 2026-07-05; ARU/ASM/Neo/Solvay coverage to verify at trigger time.