Rare Earth Diplomacy: Washington and Beijing Find Common Ground Ahead of APEC Summit
The United States and China appear to have taken a tentative step toward easing months of trade tensions, as top economic officials from both sides reached a preliminary framework that could suspend planned tariffs and delay China’s export restrictions on rare earth minerals, the discussions took place on the sidelines of the ASEAN Summit in Kuala Lumpur, ahead of a high-stakes meeting between U.S. President Donald Trump and Chinese President Xi Jinping scheduled for Thursday at the APEC Summit in Gyeongju, South Korea,
According to U.S. Treasury Secretary Scott Bessent, the framework agreement would prevent the U.S. from imposing 100% tariffs on Chinese goods starting November 1, while Beijing is expected to delay its planned licensing regime for rare earth minerals and magnets by one year, Bessent described the outcome as “a successful framework” and expressed optimism that the two leaders would finalize the deal later this week, Chinese Vice Premier He Lifeng and top trade negotiator Li Chenggang also participated in the talks, marking the fifth in-person round of negotiations since May, however Chinese officials were more cautious in tone, stating that while a “preliminary consensus” had been reached, further internal consultations were required,
Among the notable points of discussion were China’s potential resumption of U.S. soybean imports, a significant move given Beijing’s recent preference for Brazilian and Argentine suppliers, Bessent indicated that American farmers could expect strong demand “for this season and the coming years”, U.S. Trade Representative Jamieson Greer added that the talks also covered access to Chinese rare earths, a central concern for Washington, given their essential role in producing semiconductors, electric vehicles, and missile systems, the two sides also touched on several sensitive topics, including U.S. port fees, fentanyl trafficking, and the ongoing negotiations over TikTok’s transfer to U.S. ownership control, an issue Bessent said the leaders could “consummate” in South Korea,
China controls over 90% of the world’s rare earth supply, giving it significant leverage in the global high-tech and defense industries, its recent decision to expand export controls sparked fears of global shortages and renewed calls in Washington to diversify supply chains, Trump’s threatened retaliatory tariffs, coming just as a six-month truce was set to expire, risked destabilizing not only bilateral trade but also markets that rely on rare earth-dependent manufacturing, after Sunday’s talks Trump struck an unusually positive tone, telling reporters “I think we’re going to have a deal with China”, yet the Chinese side emphasized that any outcome must “respect China’s rights and interests”, hinting that Beijing would not accept unilateral concessions,
Beyond tariffs and commodities, the Trump-Xi agenda extends into geopolitics, the U.S. president has linked trade discussions with broader issues, including Taiwan, Hong Kong’s pro-democracy crackdown, and coordination on Russia’s war in Ukraine, Trump also indicated plans for future meetings with Xi in both China and the United States, suggesting that the administration seeks to transform this temporary framework into a broader strategic dialogue,
The Kuala Lumpur breakthrough represents a short-term de-escalation rather than a long-term reconciliation, both powers remain entrenched in a complex rivalry that spans trade, technology, and global influence, Beijing’s decision to delay its rare earths policy signals a calculated diplomatic maneuver, buying time while maintaining leverage, Washington on the other hand appears eager to stabilize economic uncertainty ahead of a politically sensitive period, while still preserving its strategic posture against China, whether this temporary truce evolves into a genuine shift in U.S.-China relations will depend on the outcome of Thursday’s meeting in Gyeongju, for now, the world’s two largest economies have pressed pause, but the rivalry continues to simmer beneath the surface.
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