Financial markets kicked off the week by gleefully cheering the weekend’s headlines that trade talks between the United States and China went smoothly. Just weeks earlier, Trump had threatened to impose a 100% tariff on Chinese exports and said he might call off a meeting with Chinese President Xi Jinping. Now, that meeting looks set to take place this week.
If all that seems like a rerun of a movie we’ve seen before but no one quite remembers how it ends, that’s because it never really did.
The latest escalation between Trump and Xi arose after Beijing announced plans to restrict exports of rare-earth minerals, critical materials needed to power a wide range of electronics.
But that’s hardly anything new — China, which controls the majority of the world’s supply of rare earth minerals, began putting measures in place to limit foreign access to them over 30 years ago. And as demand for China’s rare earths has increased since, so have the safeguards for allowing other countries to purchase them.
After meeting with Chinese trade negotiators in Malaysia over the weekend, US Treasury Secretary Scott Bessent said he anticipates the high-stakes meeting between Trump and Xi could result in “some kind of deferral” on rare-earth export controls.
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