US President Donald Trump’s recent outreach to Chinese President Xi Jinping may have been prompted by growing concerns over China’s tightening grip on rare earth exports, according to Tianchen Xu, Senior Economist at the Economist Intelligence Unit.Xu said the move comes at a critical moment. “Trump might have initiated the call, likely out of his anxiety about China’s export controls,” he noted. In recent months, China has imposed stricter rules on the export of rare earth minerals, disrupting supply chains, especially in the US auto sector.
The stricter export controls from China are seen as a response to new restrictions by the Trump administration. “After the tariff truce in May, the US still imposed new export controls on Chinese access to US chips. This made China unhappy,” Xu said. In return, China tightened rare earth shipments and began checking for transshipments through third countries. “But that is unsustainable… it is causing a global supply chain disruption,” he added.
Also Read | Trump says 90-minute phone call with Xi had ‘very positive conclusion’ for US, ChinaXu also pointed to uncertainty around tariff rates going forward. He said that while some of Trump’s proposed tariffs are facing legal challenges in the US, a more realistic expectation would be for the average US tariff rate to drop from the current 42–45% to around 30%. “Similarly, for China,” he said, suggesting a possible easing of trade tensions over the next few years.
The stricter export controls from China are seen as a response to new restrictions by the Trump administration. “After the tariff truce in May, the US still imposed new export controls on Chinese access to US chips. This made China unhappy,” Xu said. In return, China tightened rare earth shipments and began checking for transshipments through third countries. “But that is unsustainable… it is causing a global supply chain disruption,” he added.
Also Read | Trump says 90-minute phone call with Xi had ‘very positive conclusion’ for US, ChinaXu also pointed to uncertainty around tariff rates going forward. He said that while some of Trump’s proposed tariffs are facing legal challenges in the US, a more realistic expectation would be for the average US tariff rate to drop from the current 42–45% to around 30%. “Similarly, for China,” he said, suggesting a possible easing of trade tensions over the next few years.
While a reduction in export controls may come soon, broader tariff discussions are expected to take much longer. “We are probably seeing a talk coming very soon, like within two or three weeks,” Xu said, referring to limited progress on export restrictions. But on tariffs, he cautioned, “I don’t hold very optimistic expectations,” adding that Trump remains focused on using tariffs to generate revenue and support US manufacturing.
For the full interview, watch the accompanying video
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