Trump-Xi Summit to Focus on Key Trade Issues Amid Ongoing Tensions
The upcoming summit between US President Donald Trump and Chinese counterpart Xi Jinping is expected to feature key discussions on trade, particularly in agriculture, energy, and rare earths. The trade war has already seen significant impacts on these sectors, with agricultural goods being a major bargaining chip.
Agricultural exports, led by soybeans, have been a crucial part of the US-China trade relationship, reaching $29 billion in 2024. According to the White House, China agreed to purchase 25 million metric tons of US soybeans annually through 2028 at the Busan summit last year. However, Beijing has not officially acknowledged these agreements.
US officials believe that exempting agricultural imports from a final 10% tariff will be necessary for China to meet its commitments on other agricultural product purchases, estimated at $17 billion. Analysts expect some waivers, with sorghum and corn being potential candidates, as they were historically the largest exports apart from soybeans.
Energy is another crucial sector, with China's imposition of 10% to 15% tariffs on US oil and gas imports effectively halting trade last year. Washington has been pushing for a change since Trump's visit to Beijing in May, and energy tariffs may be part of a $30 billion package of reciprocal tariff cuts.
The resumption of Chinese oil and gas imports could lead to annual trade ranging from $7.5 billion to $12 billion between 2020 and 2024. However, this would not immediately translate to a significant windfall for US LNG producers, as Chinese buyers are still fulfilling long-term contracts with their suppliers but reselling the cargoes after purchase.
Sanctions on Iran and Russia have also been a contentious issue, with China historically being among the largest buyers of crude oil from these countries. The US has imposed sanctions on refiners and other entities for trading with them, while raising the possibility of ending some sanctions ahead of the summit.
Rare earths have become another key point of contention, with China limiting exports to the US and Trump calling on Beijing to honour its commitments. While more material is now flowing from China, US firms in sensitive industries still struggle for access due to restrictions imposed by Chinese exporters.