“We are moving forward to the final details of the type of agreement that the leaders can review and decide if they want to conclude together,” Jamieson Greer, the United States trade representative, said to newspaper reporters after talks with the Chinese. China’s top trade negotiator, Li Chengang, described the talks as “candid and in-depth discussions” on the trade deal, adding that the two sides had reached “preliminary consensus.”
The issues discussed between the officials included bilateral trade, export controls, reciprocal tariff extensions and fentanyl trafficking. Greer said that negotiations also included rare earth metals which the Chinese had put under tight export controls. US Treasury Secretary Scott Bessent told reporters conducting a Sunday news programme This Week, that he anticipated a “fantastic meeting” between Mr Trump and Mr Xi in South Korea later in the week. The framework agreed to by American and Chinese officials included agricultural purchases of concern to farmers in the United States who have been exporting large quantities of soybeans to China.
“The president had given me maximum leverage when he threatened 100 percent tariffs if the Chinese imposed their rare earth global export controls,” said Bessent. “I think we have averted that, so the tariffs will be averted.” He also said that he expected China to delay its controls over rare earth while discussions on trade issues were ongoing with the United Staes. The discussions also included steep port fees that the United States recently imposed on ships built in China or owned by Chinese companies. China retaliated by imposing tariffs on American built ships – few are left on international routes — and on ships partly or entirely owned by American companies or investors.
Both sides were careful to indicate that they did not finalise the finals deal. “China and the United States constructively explored a plan for appropriately dealing with some of the concerns of both sides,” said Li Chengang. He added, “The next step is for each side to fulfil their respective domestic approval procedures.”
By domestic procedures, Li was referencing the authoritarian system President Xi has put in place after gaining approval of the Communist Party to stay in power for longer than the two terms the country had adopted after Mao Zedong’s death. The Chinese Ministry of Commerce was following the instructions of the president. There was focus on severely restricting dealings with foreign entities on all aspects of rare earth elements. After issuing controls on the export of rare earth on April 4, it further restricted controls in the October 8 order, with the revised measures set to take effect on November 8.
According to Kith Bradsher and Zunaira Saieed, writing for The New York Times, the rules promulgated by the Ministry of Commerce would limit exports of considerable equipment, like diamond saws, that are needed in the manufacture of semiconductors and solar panels. The rules would also limit exports of equipment to make electric car batteries, another sector in which China is trying to preserve its global technological leadership. China has already reached virtual monopoly in the manufacture of solar panels.
Analysts have described the China-America dealings as a tug of war with a number of Asian states caught in the middle. “Countries in the region don’t want to be seen as just pawns that the US and PRC can pass over as the two cut deals above their heads,” said Ja Ian Chong, professor of political science at the National University of Singapore. “They want agency and would much rather have Washington and Beijing woo them so that they can play both powers off one another.”
Xi Jinping went into the talks with Donald Trump feeling that he had the stronger hand. Export restrictions on rare earth metals and equipment needed to mine and process them has placed China way above the United States. The latter is still years away from finding suitable alternatives. The two countries “defend multilateralism. They say they are not a hegemon, that they’re not a bully,” said David Meale, the head of Eurasia Group’s China practice and former US Deputy chief of mission in Beijing. “I don’t think they quite understand what they did to the world,” he said, referring to the budding trade war between the two giants.
Lyn Kupk, a Southeast Asian expert at the Washington-based Brookings Institution said that with the uncertainty surrounding the United States, many Southeast Asian countries are trying to deepen ties with Gulf nations and Europe. “That said, given China’s proximity and sustained engagement, the region could tilt toward China by design or necessity,” she said. “Beijing’s longstanding economic, strategic and diplomatic engagement with the region, both bilaterally and multilaterally, positions it to gain the most from any vacuum left by Washington.”
As demonstrated by recent events, Pakistan is deeply involved in the contest between Beijing and Washington. Departing from recent practice when Pakistan was being ignored by the previous residents of the White House, Donald Trump has gone out of his way to court Pakistan. He met with Prime Minister Shahbaz Sharif and had lunch with Field Marshal Asim Munir to discuss how the Americans could revive their old relationship. Washington could be getting close to Pakistan, noting that the country is reported to have large deposits of rare earth metals.
These are part of the belt that stretches from Kazakhstan, Afghanistan and into the northern areas of Pakistan. China is already involved in mining activity in Afghanistan and given its longstanding relationship with China, there are reports that it would want to use the ongoing China-Pakistan Economic Corridor investment program to develop Pakistan’s resources for its use.