USA Rare Earth Inc. (USAR) is experiencing a significant pre-market surge, with shares soaring 5.47% in Thursday's early trading. This sharp uptick comes as part of a broader rally in rare earth stocks, reflecting investor optimism following a major geopolitical development.

The catalyst for this surge is the announcement of a one-year agreement between the United States and China on rare earths and critical minerals. U.S. President Donald Trump revealed the deal following his meeting with Chinese President Xi Jinping in South Korea. As part of the agreement, Trump also stated that tariffs on Chinese exports would be lowered to 47% from 57%, potentially easing trade tensions between the two economic giants.

This development is particularly significant for companies like USA Rare Earth, as it suggests improved stability and potential growth opportunities in the rare earth sector. The agreement, which will be negotiated annually, could lead to more predictable supply chains and trade conditions for rare earth elements, which are crucial components in many high-tech and green energy applications. As investors digest the implications of this deal, rare earth stocks across the board are seeing notable gains, with USA Rare Earth emerging as one of the beneficiaries in pre-market trading.