Top US and Chinese officials met in Malaysia to prepare for a summit between President Trump and Xi Jinping amid tensions over China’s rare earth export restrictions, according to Fortune. While US officials described the talks as constructive, China has been reluctant to ease controls, prompting criticism from Europe, Japan, and the G7. Analysts say Beijing may have overplayed its hand, giving Washington leverage to rally allies and develop alternative rare earth sources. Trump signaled willingness to negotiate, noting that concessions may be needed on both sides to avoid escalating tariffs, which could reach 157% on Chinese goods. They write:
Top U.S. and Chinese officials met in Malaysia on Saturday to lay the groundwork for a summit between Donald Trump and Xi Jinping, with some on Wall Street saying Beijing overplayed its hand by imposing draconian restrictions on rare earth exports.
Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng held negotiations that the U.S. characterized as constructive. But sources told the Financial Times China was reluctant to ease the export controls. […]
“As China’s leader Xi Jinping stands firm on implementing sweeping export controls on rare-earths and other critical minerals, signs are mounting that Asia’s biggest economy has gone too far this time,” Yardeni Research said in a note on Tuesday. […]
Meanwhile, the U.S. is scrambling to develop alternative sources of rare earths and turning to allies like Australia, though new supplies could take years to reach the market. […]
“Sure they’ll have to make concessions. I guess we will too,” he said. “We’re at 157% tariff for them. I don’t think that’s sustainable for them. They want to get that down, and we want certain things from them.”
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