US and Chinese negotiators are meeting in Malaysia this weekend in a last-ditch effort to stop a trade war from spinning out of control and pave the way for a crucial summit between President Trump and leader Xi Jinping in South Korea next week.
The Stakes Are High:
- Rare Earths vs. Tariffs: China’s new restrictions on rare earths (critical minerals for everything from phones to F-35s) have triggered an explosive response from Washington. President Trump is threatening to slap an additional 100% tariffs on Chinese goods and expand export curbs on critical US software.
- The Truce is Shattered: The meeting aims to restore the fragile trade truce that was in place after both sides fired “the latest shots” this month.
- Leaders’ Meeting on the Line: Treasury Secretary Scott Bessent said “everything is on the table” if a deal can’t be reached on rare earths, which could determine if the Trump-Xi “pull-aside” even happens.
The crowded agenda also includes securing China’s commitment to buy US soybeans and talks on Russia’s war in Ukraine. Failure to de-escalate this weekend risks a dramatic and costly economic spiral.
