China's latest round of economic and trade consultations lasted for two days and officially ended on the afternoon of October 26th. U.S. Treasury Secretary Bescent took the lead in accepting an interview with the media. It is revealed that China and the United States have worked out a very successful negotiation framework, laying the foundation for the South Korean meeting.
Subsequently, Chinese negotiating representative Li Xing Steel accepted media interviews, revealing that the talks contained numerous topics.301 ship charges, Fentanyl tariffs, and the issue of further extension of tariffs between the two sides, China and the United States negotiating representatives made constructive discussions, eventually achieving a preliminary framework, however, then Minister Li described the specific situation of the talks between the two sides with such a phrase "The US side is tough in expressing its position, and China is firm in safeguarding its interests".
In this negotiation that affects the global industrial chain, the core contradiction lies in the rare earth card. On October 9th, China just introduced new regulations, which brought the export of rare earth technology and rare earth-containing products with a content of more than 0.1% under control, directly hitting the key points of the U.S. military industry and new energy industry. You know, 92% of the world's rare earth smelting and separation capacity is in the hands of China. Although the United States is eager to sign a mineral cooperation agreement with Australia, the industry estimates that it will take at least ten years to rebuild a complete industrial chain, and it will cost billions of dollars.
U.S. Treasury Secretary Basent also made no secret at a press conference: "China's commitment to deregulate makes it unnecessary for us to retain the tariff threat." Behind these words is full of helplessness. Take the F-35 fighter jet for example. Each aircraft requires hundreds of kilograms of rare earth materials, which are inseparable from everything from engine coatings to electronic components.
If China really cuts off supply, Lockheed Martin's production line in the United States may have to shut down. Not to mention the new energy vehicle industry. 70% of the world's production capacity is in China. If Tesla's super factory lacks this thing, Musk estimates that he will be anxious.
How precise is China's counterattack this time? The new regulations not only restrict the export of rare earth raw materials, but also require approval for the re-export of rare earth products processed overseas using China's technology, completely blocking the path of "friendly offshore outsourcing" in the United States. The European Union has already complained bitterly. Swedish companies such as ABB and Ericsson have been forced to suspend production due to the interruption of rare earth supply.
Under these circumstances, the United States had to sit down and talk. The entire negotiation process was a fierce tug of war. As soon as the United States came up, it took on a tough stance, threatening to impose a 100% tariff on all China's exports to the United States, and also said that it would consider implementing software export controls on China. However, China does not buy this game at all. Negotiator Li Chenggang directly threw out the sentence "The United States is tough in expressing its position, and China is firm in safeguarding its interests", clarifying the nature of the game between the two sides.
In fact, the US also knows in its heart that its cards are not dominant. From January to September 2025, China imported 79.9% of soybeans from Brazil and only 8.3% from the United States, resulting in a report from the U.S. Department of Agriculture showing that soybean stocks soared 27% year-on-year, and farmers in the Midwest have begun to protest. Under this pressure, the United States had to offer to "suspend some tariffs in exchange for Chinese purchases".
More interestingly, the Chinese side has also made a clever personal adjustment outside the negotiating field. Just after Bessent complained that the Chinese representatives were too difficult to get involved, the Chinese side announced that it exempted Li from other part-time positions, allowing him to "make it lightly" to focus on negotiations.
This move takes retreat to advance, which not only responds to the accusations of the United States, but also shows China's determination. The subtext is: We have sent the toughest representatives, and let them come if we have the ability. Although the two sides have reached a preliminary framework, everyone with a discerning eye knows that this game is far from over.
China's negotiating representative, Hu Jintao, specifically reminded: "The results of the Sino-U.S. economic and trade consultation are not easy and need to beined jointly by both sides."This is a historical lesson.In the past few years, the United States has repeatedly rallied after a consensus, such as the "ZTEX event" in 2018 and the repeated tariffs in 2020, so that China has had to stay behind.
From the content of the agreement, the U.S. has abandoned the 100% tariff threat, and China has postponed rare earth restrictions, but the core issue has not been resolved. The U.S. continues to insist on not changing export control measures against China, while China has also made it clear that the easing of rare earth control depends on the actual actions of the U.S. to lift military industrial restrictions.
What deserves more attention is the strategic determination shown by China in the negotiations. In addition to the hard card of rare earths, the promotion of RMB internationalization has also become a hidden support. Australian mining giant BHP Billiton has started accepting RMB-denominated settlements, which has opened a hole in the dollar-dominated mineral trade. This "combination boxing" style of play allows China to always take the initiative in negotiations.
At present, both parties have entered the internal approval stage, but no one can guarantee the final result. Trump still shouted "China must give in" on Air Force One, and turned around to admit that "high tariffs are unsustainable." This contradictory mentality reflects the dilemma of the United States.
On the other hand, China has proved with practical actions that we have the confidence to "fight"-rare earth controls can be loosened or tightened, and soybean purchases can be increased or reduced; and we also have the sincerity to "talk"-as long as the United States shows a reciprocal attitude, the door to cooperation is always open.
China has demonstrated by its actions that no unilateral pressure can force us to swallow the bitter fruit of damaging our core interests, and that equal dialogue is the only right way to solve the problem.
On several important economic and trade issues, the two sides conducted "constructive" discussions, and the two sides reached a basic consensus on consultations in Kuala Lumpur.