President Trump and Australian Prime Minister Anthony Albanese on Monday signed the critical minerals agreement framework that aims to boost US access to both the mining and processing of Australian rare earth resources.
It was a move aimed squarely at China, which recently moved to choke off its own exports of rare earth minerals, and will be just the first show of friendship between Trump and China’s regional adversaries in the coming days.
“We’ll do a little tour,” Trump said Monday at the White House. “I’ll be in Malaysia. I’ll be in Japan.”
It is a coordinated series of diplomatic overtures that, far from being a coincidence, comes as anticipation grows for a meeting between Trump and Chinese President Xi Jinping scheduled for next week in South Korea.
Rare deal: President Trump and Australian Prime Minister Anthony Albanese sign an agreement on rare earths and critical minerals during a meeting in the Cabinet Room of the White House on Monday. (Reuters/Kevin Lamarque) ·Reuters/Reuters
In recent days, Trump listed the series of sensitive issues that are on the table between the United States and China. These include the desire to increase purchases of soybeans from the United States, a crackdown on fentanyl, issues around Taiwan, the race for AI dominance and, of course, the thorny issue of China’s recent moves to shut down its rare earth exports globally.
“I don’t want them to play the rare earth game with us,” Trump told reporters as he flew back to Washington on Sunday night.
Trump signaled Monday that China could offer threats over the rare earths issue. But, he added, their counterthreat would be triple-digit tariffs. “I could threaten them with many other things,” he added.
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Trump’s success in reaching out to these Chinese rivals remains far from certain. This is because many remain unhappy with Trump’s tariffs.
Analysts are also quick to point out that China has significant influence of its own, starting with its near-monopoly (90% of the market, by some estimates) in both the mining and processing capacity to produce these rare earth minerals that are key to modern electronics.
“Even with the current avalanche of efforts to recover onshore, onshore and offshore rare earth production, the United States is still many years away from being self-sufficient,” Ellen Ehrnrooth and Ed Mills of Raymond James noted in a recent analysis.
They added that China’s access to American semiconductors is likely to be another item on the agenda at China’s behest.
Until then, Trump’s tour with China’s neighbors is scheduled for the next few days.
This weekend, the president is scheduled to travel to Malaysia to attend a meeting of the Association of Southeast Asian Nations (ASEAN). This alliance of 10 Southeast Asian countries is often promoted as an economic counterweight to China.
It is a stop where Treasury Secretary Scott Bessent will also meet directly with his Chinese counterparts in Malaysia. This will continue to set the table for next week’s meeting between the two presidents.
Bessent called a first meeting last week in Washington with Chinese Vice Premier He Lifeng “frank and detailed.”
Frank and detailed? Scott Bessent was seen last week at the IMF and World Bank annual meetings, where he also met with Chinese officials. (Kay Nietfeld/Picture Alliance via Getty Images) ·image alliance via Getty Images
Also on the President’s itinerary is Japan, as well as the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju, South Korea.
That final meeting is scheduled for next week and will be attended by both President Trump and Xi, where they are scheduled to meet on the sidelines.
Trump’s tour is just one of many diplomatic efforts to set the agenda for next week’s meeting. China has its own diplomatic efforts underway, as well as the 20th plenary session of the Communist Party of China Central Committee in Beijing this week.
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It remains to be seen to what extent the deal with Australia, which promises to provide at least $1 billion in financing and increase cooperation starting next year on new extraction and processing efforts, will be able to close the gap if China continues its restrictive stance.
“It’s about risk reduction,” Trump’s top economic adviser, Kevin Hassett, told reporters Monday about the meeting. “Australia is going to be really helpful in the effort to take the global economy and make it less risky, less exposed to the kind of rare earth extortion that we’re seeing from the Chinese.”
“Very exciting” President Trump and Chinese President Xi Jinping will meet next week. (Brendan Smialowski/AFP via Getty Images) ·BRENDAN SMIALOWSKI via Getty Images
Trump has also repeatedly spoken about his relationship with President Xi. He has suggested that the meeting could even lead to a far-reaching new agreement, not only to avoid escalation but also to improve relations.
“It’s going to be very exciting,” Trump said Monday of the meeting, adding, “I think we’re going to accomplish something good for both countries,” even as he again refused to rule out moving ahead with the 100% additional tariffs he promised to put into effect on Nov. 1.
It’s the latest in a series of comments that have buoyed markets… for now. But the light-hearted talks have led some analysts to warn that tensions between the world’s two largest economies could quickly escalate again.
“Trump is more than willing to take the short-term pain for long-term gains in both,” Pangea Policy’s Terry Haines wrote to his clients this week. He added that Trump’s recent comments that the tariffs are unsustainable may not mean the end of tensions.
The administration’s view is that “high U.S. tariffs are ‘unsustainable’ *for China*,” Haines wrote, adding that “tariffs remain an important U.S. geopolitical and economic leverage that will not be unilaterally abandoned.”
Ben Werschkul is Washington correspondent for Yahoo Finance.
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