The ongoing trade war between the US and China has affected global production and distribution cycles, affecting economies large and small around the world. The meeting between Trump and Xi in South Korea on Thursday is expected to ease trade tensions.
We use Google Cloud Translation Services. Google requires we provide the following disclaimer relating to use of this service:
This service may contain translations powered by Google. Google disclaims all warranties related to the translations, expressed or implied, including any warranties of accuracy, reliability, and any implied warranties of merchantability, fitness for a particular purpose, and noninfringement.
US President Donald Trump and Chinese President Xi Jinping are set to meet in South Korea after six years. The two leaders have not met since 2019. The two leaders, who are attending the Asia-Pacific Economic Cooperation (APEC) CEO Summit, are set to meet in Busan on Thursday. “I have great respect for Xi,” Trump said just a few days ago. “I believe he likes and respects me very much.”
When the two leaders met in 2019, Trump was nearing the end of his first term as president. He had been waging a trade war with China since the beginning of his first term. It was only after Joe Biden won the US presidency in 2020 that the trade war between the two countries seemed to have calmed down.
However, since Trump was elected for a second term, the issue has become more complicated. The current trade war between the US and China has affected global production and distribution cycles, affecting all economies, big and small, in the world. The upcoming meeting between the two leaders is expected to discuss this problem and find solutions. On Wednesday, Trump said, "I think the meeting with Chinese President Xi will be good. A lot of problems will be solved."
Trump will mainly raise the agenda of easing the export of 'rare earths', i.e. rare minerals found on the Earth. He also hopes for cooperation from the Chinese side in controlling drugs. Similarly, Xi will demand a reduction in the high customs duties imposed on Chinese materials in the US and the free export of advanced semiconductor chips from the US.
A group of 17 chemical elements found on Earth are called rare earth elements. They are used in the manufacture of military equipment such as smartphones, electrical appliances, car parts, ships and fighter jets. They are also used to make batteries, motherboards, screens, speakers, motors and other parts.
According to a report by the International Energy Agency, it is estimated that 60 percent of the world's total rare earth elements are mined in China. More than 90 percent of the rare earth metals that can be used in devices (processed rare earth metals) are processed in China. Since last April, Beijing has tightened the supply of seven rare earth elements and related technologies, citing national security reasons. This is seen as a new series of trade wars between the world's two superpowers.
According to the US Geological Survey, from 2020 to 2023, about 70 percent of rare earth elements and metals were exported to the United States from China. It has not been long since the US was so dependent on China for rare earth metals. As this issue comes up for debate, the number of people questioning the Trump administration's ability and trade policy is increasing.
In January of this year, the Trump administration decided to tighten the export of advanced semiconductor chips. This decision was taken to target certain Chinese companies. In response, China in April tightened the export of rare earth elements. This has added challenges to the production of electronic vehicles, daily consumer appliances and smartphones in the United States and Western countries.
A few days ago, US-Chinese representatives held talks in Kuala Lumpur, Malaysia, to reduce the latest tension. China's condition in the talks was that the export of advanced semiconductor chips should be facilitated before the restrictions on rare earths are relaxed. The reason for the US tightening the export of semiconductor chips to China was not commercial. Its goal was to hinder China in cutting-edge AI research, and this work had been underway since October 2022 during the Biden administration. Therefore, the US strategy of hindering China's technological development by relaxing the export of semiconductor chips will not succeed. That is why it is also seen as a strategic confrontation between a rising power and an existing superpower.
Julia Lovell, author of ‘The Opium War: Drugs, Dreams and the Making of Modern China’, told Andrew Higgins of the New York Times, “President Trump sees China as the winner of the modern international order. However, Xi Jinping sees China as the victim. These conflicting views can also cause deep instability in such dialogues.”
Trump on Tuesday signed an agreement with Japanese Prime Minister Sanai Takaichi to jointly mine and process rare earth metals and other minerals. The two countries will jointly process and store the necessary minerals and use them for mutual benefit, according to a statement issued by the White House.
Japan is the only country among the world’s major economies that is steadily reducing its dependence on China for rare earth metals. Many in the United States want to follow Japan’s model.
Tensions between the two countries began in 2010 after a Chinese fishing boat and a Japanese coast guard boat collided in the East China Sea. Concerns that China might stop exporting rare earth metals were a major concern for Japan at the time, which would have a severe impact on Japanese industry, especially carmakers. Since then, Japan has been cautiously reducing its dependence on China for rare earth metals. Japan's dependence on China has fallen from 90 percent to 60 percent.
China is also reducing its trade dependence on the United States. On Tuesday, it signed an agreement to upgrade its free trade agreement with the Association of Southeast Asian Nations (ASEAN). The bloc is China's largest trading partner. Bilateral trade between China and the Asian bloc reached $771 billion last year. Meanwhile, trade between the United States and China was $659 billion at the same time.
Although the trade war has caused great damage to the two superpowers and the rest of the world, neither leader sees himself in the wrong. Trump had threatened to impose a 100 percent tariff on Chinese goods starting November 1 if China does not ease its restrictions on rare earths. However, the situation has calmed down somewhat since a meeting between representatives of the two countries in Malaysia this weekend. The Trump-Xi meeting is expected to play a role in temporarily easing this tense atmosphere.
However, it is still unclear what will happen to the high tariffs that Beijing and Washington have imposed on each other since the start of the trade war. As of September 25, China had imposed an average tariff of 32.6 percent on goods imported from the United States. Similarly, the United States has imposed an average tariff of 57.6 percent on goods imported from China. While in April, such tariffs from both sides were at their highest, above 130 percent.
“Both leaders feel they have the upper hand in the trade war,” said Bonnie Glaser, managing director of the Indo-Pacific Program at the German Marshall Fund in the United States. “Both sides want to impose high tariffs. But they want to avoid retaliatory tariffs imposed by the other country.’ On Tuesday, Chinese Foreign Minister Wang Yi spoke by phone with US Secretary of State Marco Rubio. Wang acknowledged that there are problems in US-China trade relations and said that both sides should move forward in the spirit of equality, respect and mutual benefit.
Analysts say that the meeting between Trump and Xi will focus on stopping the trade war for the time being rather than finding a permanent solution. Dr. Jianli Yang, a research fellow at the Kennedy School of Government of Harvard University, an expert on US-China affairs, wrote in The Diplomat, ‘This meeting will focus less on a comprehensive agreement and more on removing immediate obstacles to trade.’
Similarly, Craig Kafura, foreign policy director at the Chicago Council on Global Affairs, writes, ‘If an agreement is approved here, it will immediately put an end to the economic conflict between the US and China. There will be no turning point in relations between the two countries.’
Trump has become the first American leader to receive South Korea’s highest honor, the Grand Order of the Mungyeong. He was awarded the honor for his efforts to establish peace on the Korean Peninsula. “I want to wear it right away,” Trump said as South Korean President Lee Jae-myung presented the medal. Trump was presented with the honor while he was attending the APEC CEO Summit in Jeonju, South Korea.
South Korean President Lee praised Trump for his role in resolving the dispute with North Korea. He also urged Trump to play a similar role again. Trump had held several talks and discussions with North Korean leader Kim Jong Un during his first term as an initiative to establish peace on the Korean Peninsula.
American agenda
Chinese agenda
