Understanding the Trump-Xi Meeting and US-China Trade Truce: Political Analyst

Welcome back. I'm Tiffany Meyer. President Trump met with Chinese regime leader Xiinping this week in a highly anticipated meeting. Before this meeting, the Chinese Communist Party trying to impose curbs on global rare earth exports, but it let up after the negotiations with Trump. The CCP also published its new 5-year plan this month. So, what does the future hold for USChina relations? Can the Chinese economy survive Trump's reordering of global trade? And who holds more cards in the trade war? Joining us now to unpack all of this is Anders Core, publisher of the Journal of Political Risk, principal at Core Analytics and author of the Concentration of Power. Anders, thank you so much for joining us. A lot of focus on the Trump meeting. It covered a lot of ground from fentinel, soybeans to rare earth according to reports. Now, given these are verbal agreements, no deal has been signed yet. Is it more of a trade truce than a trade deal? How are you reading this? >> That's a great characterization. Uh the devil is in the details here. You know, Trump decreased the uh fentinel related tariffs by 10% from 20%. Um you know, so clearly there's some very hard bargaining here. Um and the you know, we'll see what happens as far as whether China actually makes changes to its counter narcotics enforcement, but um I don't think anyone's really holding their breath. And I think that uh the 10% drop uh in that particular one is probably a goodwill gesture. I think Trump was really making an effort. I think you see in his relation his his relations with she that he's really uh bending over his backwards essentially to you know extend the best hand put the best foot forward uh try to be friendly uh despite all of the problems uh which is to his credit um you know but I didn't see Xi Jinping returning the favor at all really >> now fentinel of course huge issue another of the key aspects people were watching for in that Trump she meeting was the issue of rare earths While China has agreed to delay the recent rare export controls for a year, the ones from April appear to still be in place. Now, those covered seven of the metals as well as magnets that are critical for automakers and defense companies. What do you make of these verbal trade agreements? Is it back to the status quo before the recent escalations? >> I think that's a good good uh approach or thought. uh you know it's these rare earth uh element um export controls are really kind of boiling this the frog slowly as it were. It's um you know we're starting to get used to the idea of China imposing export controls on its rare earth elements. It it had it it didn't do that in a serious way before it did it a bit to Japan in 2010 and um some some other minor stuff but um you know we really should have been on this decades ago in terms of stockpiling everything that was necessary getting our own supply chains in order um you know as soon as we saw them do that against Japan a decade and a half ago we should have we should have taken more action but we didn't and now we're caught flatfooted essentially um and we're a bit over the barrel in these negotiations. So what Trump is doing is really a buying time so that we can get our own supply chains going that are independent of China. B we are uh you know engaging with uh Japan, Australia, Malaysia, even Cambodia which is usually thought of in China's court um to uh ink deals on rare earth elements. problem is that the the key there's a lot of rare earth out there ironically but uh the refining of the rare earth elements is the key issue and there's a couple of rare earth elements that are in China and Myanmar only so uh we should really be looking uh to another Trump deal with Myanmar if we can get it but of course Myanmar is in a civil war there was a coup recently um so it's a it's a very dynamic situation and we're going to see what happens essentially And on that global roll out of China's export controls, we are seeing American allies like Canada leading the charge of the G7 summit to launch a new alliance in a bid to reduce China's rare earth monopoly. In your view, does that signal a growing coalition of freedomloving countries banding together against authoritarianism? >> I think so. um you know the the rare earth element export controls from China are a real eye openener for a lot of countries because it's a glo it's essentially a global law they're they're trying to impose their will uh globally on the entire uh rare earth element market um and that would obviously have major implications for uh military industries, defense industries um everything from missile defense radar, uh, drones, uh, you know, even AI semiconductors, all these things are affected by would be affected by a rarest element export ban by China. And so they could be pickers and choosers in terms of which defense industries win and lose, which would of course be a disaster for Taiwan. It would be a disaster for the United States and Europe uh, in its fight against Russia. So, um, countries aren't going to just roll over and let that happen. But at the same time, um, it's a very difficult, uh, road to hoe because, uh, again, we don't have our we don't have our supply in order. So, we're in trouble. We better get moving. >> And switching gears a little bit, you have a piece out on the Chinese Communist Party's new five-year plan. First, what stood out to you in that? >> It's a bit more of the same. I mean they they're they're picking and choosing uh which industries are going to be the the the winners, which ones are going to be subsidized by the state. Um and those include AI, semiconductors, um you know, drones, all of the things that one would expect them to expect to be the next big thing uh in you know, world technological development. They wanna they want to control things in the same they they see what the power is of controlling something like rare earth elements or semiconductors. The US currently along with Japan and the Netherlands controls the best semiconductors and semiconductor making machines. So they want to put themselves into that position of uh you know essentially being a gatekeeper for a major global technology um and being able to leverage that for immense amounts of power. Um and that that's what they're doing is subsidizing but the people who pay the biggest price for that is the Chinese consumer and the Chinese citizen uh because they have you know their their uh purchasing power in terms of what percent of it drives the or what percent of that Chinese economy is driven by consumer purchasing is you know around 50% and that's a lot less by 10 20% uh compared to uh the rest of the world. So unfortunately for the Chinese consumer, the Chinese Communist Party has a has a lock on them and is able to squeeze them for everything they got in order to for the CCP to try to um use that economic power instead of for buying consumer goods for its citizens, use it for their own malign purposes. >> Well, Anders Core, as always, thank you so much for joining us. Thank you.