Trump, Xi and the U.S.-China Relationship

0:00Today on State of the World, Trump, Xi, Xi, and the U. China relationship.

0:09You're listening to State of the World from NPR. We bring you the day's most vital international stories, up close where they're happening. It's Thursday, October 30th. I'm Greg Dixon. Months into a trade war between the U.S. and China, President Trump met with Chinese leader Xi Jinping in South Korea. And speaking to reporters on Air Force One afterward, Trump seemed pretty happy. Overall, I guess on the scale of from zero to 10, with 10 being the best, I would say the meeting was at 12. Some deals easing the trade war were announced. Trump said he would lower the 20 percent tariffs on China because of the fentanyl issue down to 10 percent.

0:49And China says the U.S. agreed to stop charging port fees for Chinese vessels docking in the U.S. China will resume buying U.S. soybeans, do more to stop fentanyl, and it will defer export controls on rare earth minerals. In a few minutes, we're going to hear about the recent rare earth deals the Trump administration has made with other Asian countries. First, for a look at the state of the relationship between the U.S. and China following this meeting, we're going to hear from Nicholas Burns. He was the U.S. ambassador to China under the Biden administration. He spoke to Leila Foddle. So as we just heard, Trump rated this meeting with Xi a 12 out of 10.

1:29But looking at the agreements that came out of it, did the U.S. get what it wants from China? You know, I think, Leila, what we're looking at is this was not a comprehensive trade deal. And it's more like an uneasy truce in a still-simmering trade war between the two countries. There were some positives. Xi Jinping agreed to help the United States with fentanyl. The majority of the precursor chemicals that go into fentanyl, the synthetic opioid, come from the Chinese black market. President Biden had worked on this, and now President Trump. And so let's hope the Chinese will fulfill their commitments to do more to help us.

2:05Xi Jinping also agreed to buy more agricultural products from the United States. This is very important. China has the largest market for U.S. agricultural exports. Two years ago, the Chinese bought$41 billion worth of our ag products. and they haven't done anything this year because they've been playing hardball on the negotiations, especially on soybeans. So if, in fact, the Chinese will now engage in normal trade, it's going to help the American farmer. And third, the Chinese two weeks ago surfaced a proposal to put export controls on rare earth metals. This would have roiled global markets and really interfered with trade and they've decided to postpone that for a year.

2:46So I think those are solid achievements of this meeting. But here's the problem. The effective tariff rate between the two countries is now 47 % on a$642 billion two-way trade relationship. So they still have substantial tariffs on each other. And there are sectoral tariffs that President Biden put in place, 100%, for instance, on Chinese electric vehicles. So they're still in place. So I think the trade war continues. There was a truce in South Korea. That's positive. But expect a lot of further sparring between these two trade antagonists. Do you see this meeting as a path out of this trade war, though, with China?

3:30Possibly. But there's been a pattern since Liberation Day when President Trump announced his big tariff proposal, global proposal. And that is that there have now been three or four major meetings between the U.S. and China. They say they've resolved their differences, and then one or the other goes out and puts more tariffs on or does something that the other disagrees with. And so there's been a back-and-forth quality. It's not an easy relationship. The Chinese government can be extremely difficult to work with. They have been a serial violator of global trade laws for a generation now. So I don't think we can take from this meeting that somehow all the problems have been resolved because they have not.

4:10I'm curious, you know, you talked about the positives for the U.S. out of this meeting. Did China get what it wants from the U.S.? What China really wants is for the United States to remove its export, our export controls, on the sale of advanced technologies into China. President Biden placed a complete restriction on the sale of American advanced semiconductors for AI purposes. And the reason he did that is because in China, if Intel or NVIDIA export semiconductors into the Chinese market, that company, the Chinese company that receives the technology, would have to give that technology to the People's Liberation Army to try to outcompete the American military in our competition for power.

4:54And so I very much hope that the Trump administration will not allow that to happen. That's what the Chinese want. There's been some talk that the Trump administration might agree to it. It does not appear, at least at this point, to have been part of the agreement, that's good. We shouldn't be sending, should not, our most advanced technologies into the Chinese market because that'd be bad for our military and we've got to protect our military. I'm curious what you make of President Trump saying he ordered the Pentagon to start testing U.S. nuclear weapons, quote, on an equal basis with Russia and China.

5:28I mean, this is a major shift in U.S. policy. What do you make of it when there's been this tension with these other nuclear armed superpowers? You know, it may be, and there's not a lot of detail and what President Trump said, it may be in response to what the Russians announced last week on a further enhancement of their nuclear weapons program. And it may be that President Trump is trying to get the attention of the Russians and the Chinese that if they go off and begin to violate international agreements, the United States can do that too. That's an educated guess on my part. I found it certainly was not coincidental that this announcement was made one hour before President Trump and President Xi sat down.

6:06You know, both sides try to have leverage over the other, and it must have been an intentional announcement designed to get the attention of the Chinese leadership as well as the Russians. That's Nicholas Burns, who served as U.S. ambassador to China during the Biden administration. Thank you for your time. Thank you, Leila. As we just heard, one of the results of the meeting between Xi and Trump was China suspending its restrictions on sending rare earth minerals to the U.S. In President Trump's travels through Asia ahead of this meeting, he signed agreements about rare earths with several nations.

6:39It's part of an effort to reduce U.S. reliance on China for the elements, which are critical to making everything from electric vehicles to jet fighters. NPR's Jackie Northam tells us what we know about those deals and why they're happening now. President Trump has made building up the country's self-sufficiency in rare earths, an important part of his administration. This week, he went into the region China dominates, signing rare earth agreements with Japan, Malaysia, Thailand, Vietnam, and Cambodia. I think they're very strategically placed deals. Ryan Castellew is the managing director and founder of Atomos Intelligence, which focuses on rare earths and battery materials.

7:20He says the timing of Trump's rare earth deals was notable, just ahead of his meeting with Chinese President Xi Jinping. I think it's very much a challenge to China and is designed to help strengthen the U.S.'s hand in advance of Trump-Xi meetings this week. The rare earth deals vary by country, depending on what they need from the U.S. and what they have to offer. Castellews says, for example, Thailand is a hub for processing rare earth minerals. Malaysia has an abundance of rare Earths but could use U.S. investment to build infrastructure. Castellew says Japan is a major producer of rare earth permanent magnets but relies on Chinese suppliers.

8:02So partnering with Japan to try and help it cross the final chasm of reliance on China dovetails with the U.S.'s own interests that can help undermine or erode China's dominance longer term. Still it's unlikely the new agreements will be enough to break China's dominance on rare earths. It's just a lot of noise. All of that activity is to give the appearance of progress. But the truth is, all of those things are just headline-seeking, headline-grabbing. James Kennedy is the founder of Three Consulting, which specializes in rare earth minerals. He says many of the Asian nations already supply rare earths to China and may be leery of angering their powerful neighbor by working with the U.S.

8:47Kennedy points to Vietnam, which he says is under the shadow of China. If the U.S. goes in and tries to cut deals in Vietnam, they're probably going to get a backlash from China because China considers that part of their Monroe Doctrine. In other words, China does not want to see U.S. influence in its backyard. But even if the Asian nations do follow through with U.S. agreements, nothing is going to happen overnight, says Ted Wittenstein, a specialist on U.S., China and technology security issues at Yale University. The process of rare earth extraction all the way to refining, all the way to manufacturing actual products is a very complex supply chain and it's very difficult to construct.

9:37The challenge is going to be the timeline. Not to mention money. Wittenstein says it's still worth doing the agreements even if the impact on China's rare earth dominance is limited. It can certainly have the effect of signaling to Beijing that the United States will continue to look to diversify, if not secure, its own supply chain. Wittenstein says the U.S. will have to create more alliances and agreements in other parts of the world to be fully self-sufficient in rare earths. Jackie Northam, NPR News.

10:17That's the State of the World from NPR. Thanks for listening.