Background on Key Figures and Context
The United States and China are currently engaged in negotiations to prevent a further escalation of their trade war, following threats from President Donald Trump to impose 100% tariffs on Chinese products. The key figures in these discussions are Scott Bessent, the U.S. Treasury Secretary, and Jamieson Greer, the representative for trade at the White House.
Rare earths are a group of 17 chemical elements crucial for various high-tech industries, including electronics, clean energy technologies, and defense systems. China dominates the global rare earths market, controlling about 80% of the world’s reserves and production. This has raised concerns in the U.S. about China’s potential use of rare earths as a political tool, given the strategic importance of these materials.
Negotiation Details and Key Points
According to Bessent and Greer, the negotiations in Kuala Lumpur, Malaysia, have led to several key agreements:
- No export controls on rare earths: China has agreed not to impose export restrictions on these critical materials.
- No additional 100% tariffs on Chinese products: The U.S. has dropped its threat of imposing 100% tariffs on Chinese imports, at least temporarily.
- Agricultural product purchases by China: The U.S. will see increased purchases of agricultural products from China, including precursor chemicals to combat the opioid crisis.
Bessent emphasized the influence granted to him by Trump’s threats, stating that this allowed for a more favorable outcome in negotiations with China.
China’s Strategies on Rare Earths
China has implemented three strategies regarding rare earths:
- Export restrictions
- Enhanced control through traceability
- Ensuring supply stability
China reported a 28.4% decrease in rare earth exports to the global market during the first half of 2025, totaling $270 million, according to data from the General Administration of Customs of China.
Trade Tensions and Impact on US Farmers
Trump’s threats of additional 100% tariffs on Chinese imports, resulting from trade restrictions, have caused significant concern for U.S. farmers, particularly soybean producers.
Bessent expressed optimism that farmers would feel satisfied once the agreement with China is announced, both for the current season and in the coming years.
Optimism on Trade Deal
Greer also shared his optimism about a potential trade deal between the two nations.
“I believe we are moving towards the final details of a type of agreement that leaders can review and decide whether to finalize together,” Greer told the press.
Key Questions and Answers
- What are rare earth elements? Rare earths are a group of 17 chemical elements critical for various high-tech industries, including electronics, clean energy technologies, and defense systems.
- Why are rare earths important in US-China negotiations? The U.S. is concerned about China’s dominance in the rare earths market and its potential use of these materials as a political tool.
- What agreements have been reached between the US and China? Both parties agreed not to impose export controls on rare earths, drop the threat of additional 100% tariffs on Chinese products, and increase China’s purchases of U.S. agricultural products.
- How will these negotiations impact US farmers? Farmers, especially soybean producers, are expected to feel relieved and satisfied once the agreement with China is announced.
