US eyes China export curbs as Trump wobbles on meeting with China’s Xi

The showdown between the Trump administration and China is escalating. The president is reportedly considering a new set of restrictions on US technology products.

Reuters reports:

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China is proving more resilient than many experts thought. According to new export data, about a billion dollars of exports cross the Pacific every day from China to the US despite President Trump’s tariffs.

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The US and India are nearing a deal to cut tariffs on New Delhi to 15-16% from 50%, according to a report in the Mint. President Trump hiked tariffs on India back in August, claiming that India’s Prime Minister Narendra Modi was helping to aid the Russia-Ukraine war by purchasing oil from Moscow.

Trump said on Tuesday that he and Modi had spoken on the phone and agreed to reduce India’s purchase of Russian oil.

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Rising trade tensions have caused options traders to pile into defensive stocks as a hedge against big stock market swings before President Trump and China’s President Xi Jinping are set to meet.

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President Trump on Tuesday wavered over whether a highly anticipated meeting with Chinese leader Xi Jinping would actually happen later this month.

“Maybe it won’t happen,” Trump said at a luncheon he hosted for Republican senators, per Bloomberg. “Things can happen where, for instance, maybe somebody will say, ‘I don’t want to meet, it’s too nasty.’ But it’s really not nasty. It’s just business.”

The comments were the latest in a series of Trump’s waffling over the anticipated negotiations, which still do not have a confirmed date. Even as Trump raised questions over the status of the meeting, he said he expected trade talks with China to be successful.

“I have a great relationship with President Xi. I expect to be able to make a good deal with him,” Trump said. “I want him to make a good deal for China — but it’s got to be fair.”

China responded on Tuesday to President Trump’s rare earth deal with Australian Prime Minister Anthony Albanese by saying resource-rich rare earth countries should take a “proactive role” in helping to stabilize rare earth supply chains.

“The formation of global production and supply chains is the result of market and corporate choices,” a spokesperson for China’s Ministry of Foreign Affairs said, according to a report from NBC.

“Resource-rich nations with critical minerals should play a proactive role in safeguarding the security and stability of the industrial and supply chains, and ensure normal economic and trade cooperation,” the statement added.

Rare earths have become a critical talking point within the trade war between the US and China. China, which holds the largest reserve of rare earth resources, recently restricted exports of the key material used in technology and other products. This prompted Trump to say he would add an additional 100% tariff on goods from China. The moves from both Beijing and Washington have caused some to worry about the already fragile trade truce between the two nations.

President Trump said that the US commands “great respect” from China and that he also expects a “fantastic deal” to be established with China’s leader Xi Jinping. The US president made the comments on Monday, following weeks of back and forth between Washington and Beijing.

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The US-Australian rare earth deal announced on Monday not only aims to boost US access to rare earth materials — it also helps set the stage for negotiations with China. The deal between Trump and Australian Prime Minister Anthony Albanese is aimed at China’s President Xi Jinping, whose government recently restricted exports of its rare earth materials.

As the US and China head back to the negotiating table next week, Yahoo Finance’s Washington correspondent Ben Werschkul delves into Trump’s latest plan to befriend China’s regional rivals:

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Shares in Australian rare earths companies spiked after President Trump and Australian Prime Minister Anthony Albanese announced an agreement that will give the US increased access to Australia’s supply of critical minerals.

Rare-earths producer Lynas Rare Earths Limited (LYSCF) jumped by more than 14% in the hours after the trade deal announcement, while Australian Strategic Materials (ASMMF) — a vertically integrated extractor, refiner, and manufacturer of metals and alloys including rare earth products — rallied by more than 24%.

Just five months ago, Lynas became the first producer of so-called “heavy” rare earths outside China, making it a crucial player in the global rare earth supply chain.

Shares in Nova Minerals (NVA), an Australian mining company that recently saw interest from the Trump Administration due to a gold prospect in one of the company’s Alaskan mining projects, were trading down by more than 25% after a surge of more than 100% last week when news broke that the company was briefing the White House.

The deal between the US president and Australian prime minister represents of a pipeline of $8.5 billion in critical minerals, the Australian PM said at the White House.

“In about a year from now, we’ll have so much critical mineral and rare earths that you won’t know what to do with them,” Trump said at the White House on Monday.

Australia sits on the world’s fourth largest deposits of rare earth minerals, with more than five million tons. Over the course of the past month, more than a dozen Australian mining companies met with US administration officials in Washington about resource pipelines and potential investments, according to Bloomberg.

The US and Australia on Monday signed a deal on rare earth minerals, in what could end up being a cudgel for President Trump in his administration’s upcoming trade talks with China.

The agreement would increase US access to critical minerals and rare earths, the White House said, at a time when China has taken steps to curb its own supply of those materials.

“In about a year from now, we’ll have so much critical minerals and rare earths that you won’t know what to do with them,” Trump said at the White House during a meeting with the Australian prime minister.

The White House fact sheet has some more details on the agreement.

Our markets blog will cover some of the movers in this space, as well.

Bloomberg reports on more comments from President Trump on coming trade talks with China:

Trump also said he expects to make a visit to China in early 2025.

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President Trump has said rare earths, fentanyl, and soybeans are his top issues with China, days before Washington and Beijing head back to the negotiating table and the trade truce nears expiration.

Trump also suggested Beijing failed to curb fentanyl exports, which he alleged is contributing to America’s opioid crisis.

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China’s economic growth slowed to the weakest pace in a year in the third quarter despite a boom in exports, according to data on Monday from China’s National Bureau of Statistics.

A prolonged property slump and trade tensions have hurt demand, putting pressure on policymakers to provide more stimulus.

Monday’s data showed that the gross domestic product (GDP) grew 4.8% from July to September, slowing to 5.2% in the second quarter.

Reuters reports on the takeaways from analysts:

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Amid tense US-China trade relations Chinese exporters have given up on the US and responded to high duties by selling more goods to buyers in Europe, Latin America and the Middle East and Africa.

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As luxury Swiss watchmaker Ulysse Nardin debuted its latest high-end Freak watch at New York Watch Week, CEO Patrick Pruniaux said he’s not concerned about the impact President Trump’s tariffs may have on its bottom line, Pras Subramanian reports:

Oil markets are trying to make sense of claims from Donald Trump about whether India and China will continue to purchase Russian oil, offering the latest example of how the president is willing to intertwine energy, trade, and geopolitics.

This past week has seen Trump repeatedly claim that India is soon set to buy “no oil” from Russia, which, earlier in the week, Indian officials declined to confirm.

Trump was unbowed, saying Friday at the White House, “They’ve already de-escalated.”

Equally significant as both sides navigate the oil issue is the fact that Indian officials were also in Washington this past week for the annual meetings of the IMF and World Bank, where they reportedly talked trade with the Trump administration.

On the table are 25% blanket duties on India over the issue of Russia oil purchases, on top of 25% “reciprocal” duties.

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