What’s up for negotiation
- Rare-earths and export controls: China recently expanded export licensing and restrictions on rare earth metals and high-tech materials — critical for electric vehicles, defence, and electronics. The U.S. is keen to push China on easing those controls, and China is holding firm.
- Tariffs and trade access: Trump has threatened sweeping tariffs (even 100 % on Chinese exports) if a deal isn’t reached. On the flip side, China wants more favourable conditions for its exports and wants the U.S. to remove some trade-restrictions.
- Purchase commitments and market access: Trump is pushing China to buy more U.S. goods (like soybeans, agricultural products) and open access in key sectors. China is under pressure to respond.
- Technology & semiconductor controls: The U.S. export controls on semiconductors and advanced technologies to China are a major sticking point. China may use this as leverage.
- Geopolitical backdrop: Issues like Taiwan, regional alliances, and overall U.S.–China strategic rivalry are shadowing the trade talks — meaning this isn’t purely about economics.
The stage is set for a major face-to-face between the world’s two most powerful leaders. President Donald Trump has confirmed that he will meet Chinese President Xi Jinping next week on the sidelines of the Asia‑Pacific Economic Cooperation Summit in Busan, South Korea.
The atmosphere, however, is far from calm. Talks are entering this meeting with real tension. China recently slapped new export controls on rare earths — critical materials used in everything from electric cars to fighter jets — in a move that surprised Washington. Trump’s response has been equally firm: he’s vowed 100 % tariffs if a deal isn’t struck, and made clear his agenda: rare-earths access, soy-bean purchases, a crackdown on fentanyl precursor shipments, and other trade concessions.
Yet analysts say the likelihood of a sweeping agreement is low. Both sides seem to believe they’re in the driver’s seat, and that power dynamic may make compromise tougher. In other words: this may wind up being a modest deal—or none at all—rather than the headline-grabbing breakthrough some hoped for.
In short: both sides have high stakes, but very different objectives, and the leverage is shifting such that neither side seems ready to give in easily. As one analyst put it, this meeting may be “a data point, not an inflection point”.
For Trump, the meeting offers the chance to show off deal-making credentials. For Xi, it presents the opportunity to reinforce China’s sovereignty and readiness to resist pressure. The world is watching.
Sources:
- Reuters
- Al Jazeera
- Bloomberg
- ABC News
- The Atlantic
- T. Rowe Price
- New York Post
- Bloomberg
- Brookings
- South China Morning Post
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