US President Donald Trump and Chinese President Xi Jinping are expected to speak this week, according to White House Press Secretary Karoline Leavitt.

This discussion follows Trump’s accusation that China violated an agreement to reduce tariffs and trade restrictions. The anticipated talks aim to address ongoing trade issues.

US Treasury Secretary Scott Bessent mentioned on CBS’ “Face the Nation” that the two leaders would speak “very soon” regarding disputes, including critical minerals and China’s export restrictions.

Although no specific date for the call has been confirmed, Trump expressed confidence that the conversation would take place.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Trade agreements without fixing structural issues show a recurring pattern

The current US-China tariff dispute follows a familiar cycle of temporary truces that fail to address fundamental economic imbalances between the two largest economies.

The Geneva agreement mentioned in the article mirrors the 2020 “Phase One” trade deal, which included China’s commitment to purchase an additional $200 billion in US goods but ultimately failed to meet those targets 1.

This pattern of negotiating temporary reprieves without resolving underlying issues has become characteristic of US-China trade relations since the trade war began in 2018, with tariffs being applied, removed, and reapplied as tensions fluctuate 2.

Economic data shows that despite multiple rounds of negotiations and agreements, the US trade deficit with China remained at US$295 billion in 2024, still the largest the U.S. has with any trading partner. This suggests that previous agreements have not fundamentally altered the trade relationship 1.

Each cycle of tariff threats and negotiations creates market volatility and planning challenges for businesses in both countries, while leaving unresolved the structural concerns about China’s state-dominated economic model.

2️⃣ China’s rare earth dominance creates asymmetric leverage in negotiations

The specific mention of “critical minerals” in the news piece highlights how China’s near-monopoly over rare earth processing has emerged as a strategic vulnerability for the United States.

China controls approximately 99% of the global rare earth processing capacity, giving it significant leverage in trade disputes, especially since these minerals are essential for technology and military applications 3.

This represents an evolution of the trade conflict from broad tariff discussions to more targeted control of strategic supply chains that affect national security, with rare earth elements being crucial components in everything from smartphones to fighter jets.