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The United States and China are unlikely to settle all their disputes before Presidents Donald Trump and Xi Jinping meet Thursday in Busan, South Korea. But both sides appear poised to announce limited progress on rare-earth exports, technology trade restrictions, and agricultural purchases — a move intended to calm jittery markets and project stability after months of economic brinkmanship.
“They’re trying to get to some kind of détente,” said Jeff Moon, a former U.S. trade official who now heads the consulting firm China Moon Strategies. “There’s no pretense that they’re going to reach a grand bargain that solves everything in the relationship.’’
Background: A strained relationship with fragile progress
After four inconclusive rounds of negotiations earlier this year — in Geneva, London, Stockholm, and Madrid — officials met again last weekend in Kuala Lumpur, Malaysia. This time, Treasury Secretary Scott Bessent described the outcome as “a very successful framework,” while China’s top trade envoy Li Chenggang said the countries had reached a “preliminary consensus.”
Trump, who has long touted tariffs as a tool of national strength, struck an optimistic tone, saying Beijing “wants to make a deal and we want to make a deal.”
The White House’s softer messaging marks a shift from early October, when Trump threatened to impose a new 100% tariff on Chinese imports by Nov. 1 — on top of an existing 57.6% average rate, according to the Peterson Institute for International Economics. But on Sunday, Bessent told CBS’ Face the Nation those punitive levies were “effectively off the table” as talks continue.
Beijing’s rare-earth leverage
One of the most contentious issues involves China’s dominance over rare-earth elements — minerals essential to military technology, renewable energy, and advanced manufacturing. Beijing tightened export restrictions again on Oct. 9, days before the Busan summit, heightening U.S. concerns.
“Rare earths are now the most effective lever that China can pull,” said Zongyuan Zoe Liu, a senior fellow at the Council on Foreign Relations. “The rest of the world does not have readily available or affordable productive capacity.’’
According to Bessent, China may agree to “delay” the new controls for a year as part of a goodwill gesture. But industry experts warn the U.S. remains dangerously dependent. “The United States must urgently build independent critical minerals supply chains,” said Pini Althaus, CEO of Cove Capital and founder of USA Rare Earth.
Soybeans and farm-state politics
China’s suspension of U.S. soybean purchases this year has hit American farmers — one of Trump’s most loyal constituencies. Bessent, who owns soybean farmland himself, said on NBC’s Meet the Press that “substantial soybean and ag purchases” are under discussion.
Farmers remain cautious. “Nothing would really discourage farmers more if there’s some very ambitious announcement, but then nothing ends up transpiring,” said Mike Steenhoek, executive director of the Soy Transportation Coalition.
Export controls and technology tensions
Beijing is also pressing for relief from sweeping U.S. export controls that restrict Chinese access to advanced semiconductors and dual-use technologies. The Commerce Department last month expanded those rules to cover any firm in which blacklisted Chinese companies own 50% or more.
Jeffrey Kessler, under secretary of commerce for industry and security, said the measure was intended to “close loopholes.” But China’s Ministry of Commerce condemned it as “extremely bad” and “severely harmful to legitimate interests.”
Ted Murphy, a trade lawyer with Sidley Austin, suggested Trump may be willing to relax some restrictions as part of a face-saving deal. “President Trump is in ‘deal mode,’’’ Murphy said. “He’s unlikely to let a meeting with President Xi go by without some kind of deliverable.’’
Drug-trade tariffs and security cooperation
Another sticking point is Trump’s tariff regime on Chinese imports tied to fentanyl production. In February, the White House imposed a 10% tax on Chinese goods to pressure Beijing to crack down on precursor chemicals — later doubling it to 20%.
Bessent said the two sides have reached “initial agreements” to stem the flow of chemicals, suggesting that a partial rollback of tariffs could follow. Chinese officials, however, remain frustrated that the administration “has not been clear about what it wants Beijing to do,” according to people familiar with the talks.
Broader context: Economic rivalry without end
Analysts say that while Trump and Xi may cool tensions temporarily, both countries remain locked in a structural contest over manufacturing dominance and national security.
China is flooding global markets with cheap goods to revive its economy after a housing crisis, while the U.S. and its allies are determined to protect their industrial base. “Those are totally inconsistent trends,” Moon said. “For that reason, I don’t see an end in sight.”
Moon added that neither country can afford a complete split: “We can’t decouple. There are things that we both need from each other. The only path forward is tactically trying to remove friction — basically slapping on band-aids without ever curing the disease.’’
Next steps
Trump and Xi are expected to meet Thursday in Busan, where any joint statement is likely to emphasize stability rather than resolution. While both leaders have incentives to avoid further economic turmoil, few expect the meeting to produce lasting breakthroughs.
“The best-case scenario is a cooling-off period,” said Liu of the Council on Foreign Relations. “The worst case is that everyone realizes the calm won’t last.”
