Trade conflict: Too few rare earths: USA accuses China of violating trade deal

The trade dispute between the USA and China is threatening to escalate again. Shortly before a planned meeting between Trump and Xi, both sides accused each other of violating their agreements.

Beijing. The images appeared harmonious when US President Donald Trump received China's head of state and party leader Xi Jinping in Washington at the end of September. They glossed over the fact that the meeting produced little tangible results. This became clear on Friday evening when US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer spoke on the phone with China's Vice Premier He Lifeng.

The US representatives accused China of not supplying enough rare earths to US companies and buying too few agricultural products from the United States. China, on the other hand, criticizes the latest US sanctions against Chinese companies. Both sides called on each other to keep the commitments made in the trade agreement.

Shortly before the planned renewed meeting between Trump and Xi at the APEC summit on November 18th and 19th in Shenzhen, southern China, the trade conflict between China and the USA is threatening to break out again. After the Republicans' clear defeat in the US midterm elections, Trump entered the meeting weakened. This makes it all the more important for him to demonstrate success.

According to US information, Bessent and Greer pushed for compliance with the standstill agreement concluded in Busan, South Korea, in October 2025. The trade conflict between China and the USA had previously escalated. The USA had imposed tariffs of up to 145 percent on Chinese imports. China responded by banning exports of the important industrial metals rare earths, on which it has a virtual monopoly.

The rare earths are needed by car manufacturers, electronics companies, in medical technology, the wind power sector and the defense industry. In the USA, but also in Europe, there was a threat of production stoppages after the embargo. In doing so, Beijing forced Washington back to the negotiating table. The USA then put a large part of the tariffs on hold, and China promised to supply rare earths.

The Busan deal was initially valid for one year and was extended until January 10 shortly before the meeting between Trump and Xi in Washington. According to various media reports, the Chinese side had hoped for an extension of a year or longer. However, the US side criticizes China's failure to abide by the agreement and demands concessions before further extending the deal. Without an agreement, there is a risk of the trade conflict escalating again.

In their phone call on Friday, Bessent and Greer again accused the government of not supplying enough rare earths and other critical minerals, contrary to the agreement. They referred to the complaints from US companies that they are not getting enough of the important raw materials from China. As the Handelsblatt learned from diplomatic circles in Beijing, the USA apparently receives significantly less of the critical minerals than the Europeans.

US government officials also called on China to buy more US agricultural goods. China had pledged to buy 25 million tons of U.S. soybeans over the next three years and increase imports of other U.S. agricultural goods by $17 billion. However, the commitment was made on the condition that the US side lowers the corresponding tariffs. The Chinese Ministry of Commerce had already emphasized on Thursday that China was ready to buy more US agricultural goods, provided that the agreement on mutual tariff reductions was implemented.

China's chief negotiator He expressed "serious concerns" in the phone call about the latest US trade restrictions against the People's Republic, the state news agency Xinhua reported. He agreed with his US colleagues to continue consultations to promote a “stable and positive” development in trade relations.

The Chinese Ministry of Commerce became clearer on Saturday after the phone call. It sharply criticized US sanctions against two Chinese companies. These are “discriminatory” restrictions against China that affect the rights of Chinese companies and undermine the stability of economic and trade relations. The ministry threatened to take “necessary measures” to protect its interests.

Although it did not name the companies, the Trump administration on Thursday expanded sanctions on foreign companies with business ties to Cuba. Specifically, it concerns the areas of electronics, manufacturing, shipping and technology.

It is still unclear how the Republican defeat in the midterm elections will affect the relationship between China and the USA. Officially in Beijing there is talk of an “internal matter for the USA”.

But Chinese foreign policy experts speculated about possible consequences in the run-up to the election. Several renowned experts such as Da Wei, director of the Center for International Security and Strategy at Beijing's Tsinghua University, and Chen Dongxiao, president of the Shanghai Institute of International Studies, point to the possible impact on arms sales to Taiwan.

China claims sovereignty over the self-governing island. Xi, in talks with Trump in Beijing in May, described Taiwan as the most important issue in China-US relations that could lead to a possible conflict. The US President has not yet approved an arms package worth $14 billion. After his visit to Beijing, he spoke of a “good negotiating tool”.

A Democratic majority in the US Congress could increase pressure on Trump to do so, Da and Chen wrote in separate posts. There are prominent representatives among both Democrats and Republicans who are critical of Trump's approach to China.