Xi and Trump hold a call, discuss rare earths
On Thursday, Xi Jinping held a call with US President Donald Trump.
- Believe it or not, this is the first time the two have talked since Trump reassumed the presidency.
Some context: The call comes amid mounting tension over China’s rare earth element (REE) export controls.
Trump described the call as “very good” and claimed that “there should no longer be any questions respecting the complexity of Rare Earth products.”
- He also said that US negotiators would be meeting with their Chinese counterparts “shortly.”
The Chinese readout didn’t mention REEs at all, instead emphasizing Xi’s message that the US and China should “steer clear of the various disturbances and disruptions.”
- Xi said that China had lived up to its Geneva pledges and urged Trump to “remove the negative measures taken against China.”
The two leaders also invited one another for a state visit.
Get smart: Color us skeptical that the REE export control spat has been fully resolved.
- At best, Xi probably told Trump that current licensing delays were due to a temporary backlog rather than deliberate slow-rolling.
- But there’s no way Xi agreed to disarm his not-so-secret weapon by taking REEs off the export control list altogether.
Crisis averted (for now): The call may have staved off a full-blown breakdown of the Geneva truce, and if REEs start flowing to US end-users, it could create space for further negotiations.
- But REEs are just one of many issues which could reignite trade war hostilities at any moment.