Trump vows ‘fantastic deal’ with Xi as rare earth tensions rise with China

US President Donald Trump said he expects a “fantastic” trade deal with Chinese leader Xi Jinping amid rising tensions over rare earth exports. Trump confirmed plans to meet Xi at the APEC summit, despite threats of new 100% tariffs.

Washington: President Donald Trump said on Monday that the US commands “great respect” from Beijing and that he will reach a “fantastic deal” with Chinese President Xi Jinping when the two leaders meet soon.

Trump’s remarks come after Beijing infuriated him by expanding export controls on rare earth products that are used in smartphones, fighter jets, electric vehicles and more. Trump spoke as he hosted Australian Prime Minister Anthony Albanese at the White House, celebrating an agreement with the US ally as a potential counterpoint to China’s near-monopoly in processing those critical minerals.

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“I think we’re going to end up having a fantastic deal with China,” Trump said. “It’s going to be a great trade deal. It’s going to be fantastic for both countries, and it’s going to be fantastic for the entire world.” When asked about China’s leverage, Trump said Beijing “threatened us with rare earths, and I threatened them with tariffs.” But he insisted his good relationship with Xi means they would work out ”a very fair deal.”

All eyes are on a potential meeting between Trump and Xi because any failure to reach some agreement raises the risk of destabilising not only relations between the two superpowers but also the global economy.

Trump affirmed that he would meet with Xi this month on the sidelines of the Asia Pacific Economic Cooperation summit, a grouping of 21 economies. Beijing has not announced plans for Xi to make the trip to South Korea, but it is not unusual for such details to emerge closer to the travel date.

Trump touts tariffs as a powerful tool

The president has threatened to impose a new 100 per cent tariff on China in response to Beijing’s expanded rules on rare earth products. And he said on Monday that it has already had results.
“Now, they’re treating us with great respect,” Trump said.

“Now, we’ll see what happens. I said, if we don’t make a deal, I’m putting on an additional 100 per cent on November 1. I think we’ll make a deal.” Since returning to the White House, Trump has levied additional 30 per cent across-the-board tariffs on China. Trump said the total rate on Chinese goods is about 55 per cent to 57 per cent and the country has paid the US “hundreds of billions of dollars worth of money for tariffs.” Beijing, however, has indicated it would play hardball.

“Threatening high tariffs is not the right way to deal with China,” Lin Jian, a spokesperson for the Chinese foreign ministry, said last week in response to Trump’s new tariffs threat.
When asked if the 100 per cent tariff could stand and how it could affect the economy, Trump told Fox Business’ Maria Bartiromo last week that “it’s not sustainable.”

At the meeting with Albanese, Trump said he has other options to use against China: “They can’t get parts for their airplanes. We build their airplanes.” Still, he said he prefers reaching a deal. “I want to be good to China. I love my relationship with President Xi,” Trump said.