China’s influence in the rare earth minerals market still gives it a significant advantage over the United States, even with a recent trade deal framework agreed upon by both countries just days before a meeting between President Donald Trump and President Xi Jinping. The meeting, scheduled to take place on Thursday during the Asia-Pacific Economic Cooperation (APEC) summit in South Korea, marks the first encounter between the leaders in Trump’s second term.
As the world’s top two economies remain entangled in a trade dispute involving tariffs exceeding 100 percent, there are concerns about the potential impact on the global economy. This situation underscores China’s readiness to leverage its strengths in negotiations amid escalating economic tensions with the U.S.
Although there is hope that tariffs may be avoided following announcements of a potential trade agreement by top officials from both nations, including discussions held in Geneva and Madrid earlier in the year, the situation remains delicate. U.S. Treasury Secretary Scott Bessent, along with other officials, revealed a “substantial framework” for the upcoming meeting between Xi and Trump at the Association of Southeast Asian Nations summit.
While the trade truce appears tentative given the complex U.S.-China relationship dynamics, there are indications of progress in certain areas. The agreement involves a potential transfer of TikTok’s U.S. operations to new ownership to avert a ban, as well as the possibility of China resuming soybean purchases from American farmers. Furthermore, China has agreed to delay its export controls on rare earth minerals for a year, addressing a major concern for the U.S.
The agreement reflects a mutual understanding of the repercussions of a prolonged conflict, indicating a shared desire between the leaders to stabilize their crucial bilateral relationship. The deal is seen as a strategic move that allows both sides to claim victories while leaving room for further negotiations and actions in the future.
As Trump and Xi prepare to meet, unresolved issues such as trade imbalances, China’s overcapacity, security in the South China Sea, and technological competition are expected to persist. The mistrust between the two nations remains a significant hurdle in reaching comprehensive agreements, making progress on smaller issues more probable.
Speculation surrounding the meeting intensified following Xi’s invitations to Trump, highlighting the unique dynamics between the two leaders. China’s recent actions to tighten export rules on rare earth minerals, despite potential risks to the upcoming meeting, underscore the country’s dominance in this critical sector. The U.S. is striving to catch up by forging partnerships to secure critical minerals and rare earths supplies, but significant challenges lie ahead.
The leaders’ domestic political landscapes also influence their negotiating positions. Xi’s consolidation of power amid economic challenges and Trump’s administration facing a potential government shutdown add complexity to the upcoming discussions. Ultimately, billions of dollars are at stake, emphasizing the importance of a positive outcome in the talks between the world’s largest economies.
The impending meeting holds significance beyond the two nations, as the global community seeks to avoid the adverse effects of a prolonged conflict between China and the U.S. The outcome of their negotiations could have far-reaching implications, underscoring the need for a constructive resolution to prevent collateral damage in the international arena.
