CW2R3 Trump-Xi Meeting

(Cold War 2 Review3, 10-2025) 

Last week, Trump & Xi met on the sidelines of the APEC meeting. It was the main event since Trump left as soon as this meeting was over. The major topic was the trade disputes between the US and China. Trump claimed that the meeting was a great success, in his words, 12 out of 10. As usual, Trump tries to spin his success.  

There were different expectations before this meeting, some optimistic, some pessimistic. For example, Larry Kudlow and Jack Keane were optimistic ([1]) because of Trump’s success in trade talks with other nations and because of his success in the Middle East (Iran and Gaza). According to initial reports and analysis, the outcome of this meeting is only a one-year truce. [2-4] are good summaries. [5-6] are official accounts with positive spins. I value Walter Russell Mead’s comment [7] highly, as usual. So the meeting did not meet high expectations. 

Why could Trump not get more despite his other successes? The answer is rare earth minerals (or sometimes called critical minerals because they are not truly ‘rare’, but mining and refining are difficult). A background video is [8]. Although only minute amounts are needed in high-tech, autos, defence industry, etc., they can cause severe production disruptions. In the 1980s, multinational companies used to produce critical minerals in the US and other nations. Globalization has moved most production to China. Since then, China has used monopolistic means to drive most nations out of production. Now China controls 70% mining and 90% refining of critical minerals worldwide. You probably recall that Trump announced so called Liberation Day tariffs. I suspect that the main target of that announcement was China, with whom the US has huge trade deficit. After several months of negotiation, the US thought that the talks had finished. Then, China announced a NEW rare earth mineral ban [9]. I remember that TS Scott Bessent was shocked. Under the circumstances, a truce is perhaps the best outcome of this meeting.  

I know investment very well. Weaponizing commodities to threaten other nations is not a good long-term strategy. I began learn about investment in 1994. Investing in minerals, mining, etc. is usually not profitable because they tend to depreciate the very long term. Crude oil and energy products are slightly better since they can be strategically important. On the other hand, rare earth minerals production takes a long lead time, probably 5-10 years. This truce is only for one year. Thus, this might have to be renegotiated every year. The US-China trade tension is likely to persist for years. 

John Lee (an Australian citizen but working at Hudson Institute in the US) speculates that Trump handles International Relations somewhat like business competitions (an interesting angle, has some value) [11]. Lee thinks that Anthony Albanese got preferential treatment because he brought a critical mineral treaty with him (shortly before the Trump-Xi meeting). (Australia really is a lucky country in this regard.) The Australian reporter Cameron STEWART is more negative on this Trump-Xi meeting [12]. Taiwan is a big question mark. WaPo had an editorial concerning Taiwan, hoping Japan would persuade Trump not to retreat from Taiwan [13]. From the initial report, Taiwan was not mentioned in this meeting. 

Trump’s tariffs completely changed the world trade structure (which I mentioned in a note in April). 11-2 Journal Editorial Report mentioned that the US Supreme Court will review related cases in the following weeks. Their ruling could fundamentally change this structure.  

References: 

1. Update 11-1-2025 

2. *Can Donald Trump and Xi Jinping’s trade war truce last? | Intelligence podcast (11-1) 

3. *What the Trump-Xi meeting means for US-China relations | Bremmer (10-31)  

4. *N Burns Trump-Xi meet: An 'uneasy truce' in a long, still-simmering trade war (10-30) 

5. Jamieson Greer: We didn’t accomplish everything re China, but a good start (11-1)

6. 'HUGE SUCCESS': U.S. Ambassador to China praises Trump's diplomatic visit (11-2) 

7. *Walter Russell Mead 11-2 Journal Editorial Report

8. Trade war explained: The rare earth metals China dominates and US needs (10-2025)

9. Ignatius WaPo 10-30 Trump and Xi flexed. Who won?

10. China expands rare earths restrictions, targets defense and chips users | Reuters 10-10  

11. John Lee 10-31 To Trump, China rivalry is all about the business of winning

12. Cameron STEWART Uneasy truce for US and China, but Xi holds the card, AU,11-1,2025 p17

13. WaPo Can Japan persuade the U.S. not to go wobbly on Taiwan? 10-25 2025

14. *WSJ 10-23 China’s New Strategy for Trump: Punch Hard, Concede Little

15. WSJ 10-28 After Demolishing U.S.-China Relationship, Trump Is Rebuilding It His Way