China’s control over rare earth minerals gives it significant influence over the U.S. despite a recent trade agreement framework. The upcoming meeting between U.S. President Donald Trump and Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation summit in Gyeongju, South Korea, comes amid escalating trade tensions between the two countries.
While both nations have announced a potential trade deal to avert tariffs, uncertainties persist in their relationship. The agreement includes provisions such as transferring TikTok’s U.S. operations, resuming soybean purchases by China, and delaying export controls on rare earth minerals for a year, a crucial point for the U.S.
The delicate balance struck by the agreement allows both sides to claim victories ahead of the meeting, with room for further negotiations on unresolved issues such as trade imbalances, overcapacity in China, security concerns in the South China Sea, and technological competition.
Xi’s recent actions, including tightening export rules on rare earth minerals, highlight China’s dominance in this sector, prompting the U.S. to seek partnerships with other countries like Japan and Australia to bolster its critical minerals supply. The leaders’ domestic political situations also play a role in shaping their positions heading into the meeting.
As the U.S. and China navigate their complex relationship, the global economy watches closely, with billions of dollars at stake. The outcome of their discussions will have far-reaching implications, as the world hopes to avoid the negative consequences of conflict between the two economic giants.