US-China Trade Truce Hinges on Rare Earths, Soybeans Lag Behind

The fragile U.S.-China trade truce is showing uneven signs of progress ahead of the summit between President Donald Trump and Chinese counterpart Xi Jinping in Washington on Thursday.

Three key commitments, soybean purchases, orders for Boeing aircraft, and access to rare earths elements, are being fulfilled at different speeds. The superpowers' May meeting reaffirmed Beijing's commitment to increase U.S. soybean imports by 25 million tons annually, with China buying nearly half of that in a single week in September. However, delivery across the three commitments has been uneven and difficult to verify.

Analysts describe the current phase as 'détente', a cooling of tensions driven by 'a balance of vulnerability.' Both sides are aware of each other's choke points, with rare earths elements being identified as China's strategic leverage. Larry Hu, head of China economics at Macquarie Group, notes that China has suspended export controls for 12 months to allow shipments of rare earth magnets.

While the rare earths commitment is harder to measure due to its focus on reliable access rather than a specified export volume, Chinese shipments have fallen by 20% from July and 13% from last year. The strategic importance of rare earths may provide the clearest signal of each nation's stance on trade ties.