Keep things together and avoid a rupture
In Paris, the world's two largest economies gathered not to resolve their differences, but to manage them — a quieter and perhaps more honest ambition. Treasury Secretary Bessent and Vice Premier He Lifeng met at the OECD to tend to a fragile trade truce ahead of a Trump-Xi summit in Beijing, navigating tariffs, rare earths, and agricultural pledges with the careful patience of those who know how much depends on not getting it wrong. The meeting was less about breakthrough than about continuity — a shared recognition that the alternative to imperfect diplomacy is something neither side can afford.
- A trade truce struck in October 2025 has held, but only barely — and both sides arrived in Paris knowing the Beijing summit in two weeks would demand at least the appearance of momentum.
- Rare earth access remains the sharpest point of friction: China has selectively withheld exports of critical minerals from American aerospace and semiconductor firms, leaving industries facing worsening shortages of materials like yttrium.
- The Trump administration complicated its own negotiating position by launching new Section 301 trade investigations and a forced labor probe that could trigger fresh tariffs within months, prompting China to publicly denounce the moves and reserve the right to retaliate.
- A broader crisis loomed in the background — the Iran conflict had spiked oil prices and closed the Strait of Hormuz, through which China receives nearly half its oil, adding economic urgency to every conversation in the room.
- Analysts expect the summit to 'superficially suggest progress' while leaving the relationship largely unchanged, with more consequential moments potentially deferred to APEC in November and the G20 in December.
On a Sunday morning in Paris, Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng sat down at OECD headquarters to review a trade truce that has held since October 2025 — imperfectly, but intact. With President Trump's Beijing visit less than two weeks away, both sides needed to arrive at the summit with something that resembled forward motion.
The agenda was specific and demanding. Tariff adjustments under the October agreement were on the table, as were China's agricultural commitments — 12 million metric tons of soybeans in 2025, rising to 25 million in 2026. Most urgently, American negotiators pressed for expanded access to rare earth minerals and magnets, materials China dominates globally but has withheld from U.S. aerospace and semiconductor firms, leaving them facing critical shortages of substances like yttrium, essential for jet engine coatings.
Analysts counseled modest expectations. Scott Kennedy of CSIS described the likely outcome as a meeting designed to 'keep things together and avoid a rupture' rather than achieve genuine concessions. Trump might leave Beijing with new Boeing orders or LNG commitments, but would likely need to offer ground on export controls to get them — a trade-off that would leave the underlying tensions unresolved. Further summits at APEC and the G20 later in the year were seen as more plausible moments for durable progress.
The negotiations unfolded against a volatile backdrop. The U.S.-Israeli conflict with Iran had closed the Strait of Hormuz, through which China receives 45 percent of its oil, sending prices higher and adding economic pressure to an already strained relationship. Bessent had issued a 30-day sanctions waiver to ease oil supply, while Trump called on other nations to help protect shipping lanes after American strikes on Iran's Kharg Island.
The Trump administration also brought new complications of its own making. Fresh Section 301 investigations into unfair trade practices — targeting China and 15 other countries — could produce additional tariffs within months. A separate forced labor probe covering 60 nations threatened to ban certain imports. The moves were partly designed to rebuild tariff leverage after the Supreme Court struck down Trump's global tariffs as illegal, forcing a 20-point reduction on Chinese goods. China responded swiftly, denouncing the investigations and warning of countermeasures. State media framed the Paris talks as 'both an opportunity and a test,' placing the burden of good faith squarely on Washington. The message was diplomatic in form, but unmistakable in intent.
On a Sunday morning in Paris, the two largest economies on earth sat down to talk themselves out of a corner. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng met at the Organisation for Economic Co-operation and Development headquarters to review a trade truce that has held, barely, since October 2025. The stakes were clear: in less than two weeks, President Trump would travel to Beijing to meet with Xi Jinping, and both sides needed to show up with something that looked like progress.
The agenda was dense and specific. They would discuss how to adjust the tariffs that had been trimmed under the October agreement. They would negotiate access to rare earth minerals and magnets—materials China dominates globally but has been reluctant to export freely to American aerospace and semiconductor firms. They would review whether China was holding up its end of the agricultural bargain: 12 million metric tons of soybeans in 2025, 25 million in 2026. U.S. Trade Representative Jamieson Greer joined Bessent, and the talks continued a pattern of European meetings held throughout the previous year, each one an attempt to keep the world's two largest trading partners from sliding back into the escalation that had threatened to collapse commerce between them entirely.
But the mood among analysts was cautious. Scott Kennedy, a China economics expert at the Center for Strategic and International Studies, said both sides were likely aiming for something more modest than a breakthrough: a meeting that would "keep things together and avoid a rupture." Trump might want to leave Beijing with commitments for new Boeing aircraft orders and increased purchases of liquefied natural gas and soybeans. To get those, he might have to offer concessions on export controls—the very restrictions that have left American semiconductor and aerospace companies starved for critical materials. Kennedy's assessment was blunt: the summit would probably "superficially suggest progress" while leaving the relationship roughly where it had been for the previous four months. There would be other chances. Trump and Xi could meet again at an APEC summit in November and a G20 summit in December, moments that might yield something more durable.
The Iran war hung over everything. The U.S.-Israeli conflict had spiked oil prices and closed the Strait of Hormuz, through which China receives 45 percent of its oil imports. On Thursday, Bessent had announced a 30-day waiver of sanctions to allow Russian oil stranded in tankers to reach market—a move designed to ease supply pressures. On Saturday, Trump had urged other nations to help protect shipping lanes after American forces bombed Iran's Kharg Island oil loading hub and Tehran threatened retaliation. The economic anxiety was real and immediate.
On the trade front, U.S. officials said China had largely met its commitments under the October deal. Soybean purchases had hit initial targets. But the rare earth situation remained fractured. Some American industries were receiving exports; aerospace and semiconductor firms were not. They faced worsening shortages of materials like yttrium, essential for heat-resistant coatings on jet engines. William Chou, a senior fellow at the Hudson Institute, predicted that American priorities in Paris would focus on pushing China to increase agricultural purchases and open up rare earth access in the near term.
Then there was the new complication Bessent and Greer were bringing to the table. The Trump administration had launched a fresh "Section 301" investigation into unfair trade practices targeting China and 15 other major trading partners, focusing on alleged excess industrial capacity. The probe could trigger new tariffs within months. Greer had also opened a separate investigation into forced labor practices in 60 countries, including China, that could ban certain imports. These moves were designed to rebuild Trump's tariff leverage after the Supreme Court had struck down his global tariffs as illegal under an emergency law, reducing his tariffs on Chinese goods by 20 percentage points. He had immediately imposed a 10 percent global tariff under different authority, but the new investigations signaled he was not done.
China responded on Friday by denouncing the probes and reserving the right to take countermeasures. State media called them unilateral actions that complicated negotiations. Xinhua, the state news agency, framed the Paris talks as "both an opportunity and a test," and added a pointed message: whether the talks would achieve progress "will largely depend on the U.S. side." Washington needed to approach negotiations with "a rational and pragmatic mindset," the agency said, and act in line with principles that underpin stable economic relations. The language was diplomatic, but the subtext was unmistakable. The window for a genuine breakthrough was narrow, and both sides knew it.
Notable Quotes
Both sides are aiming for a meeting that keeps things together and avoids a rupture and re-escalation of tensions— Scott Kennedy, Center for Strategic and International Studies
Whether the upcoming talks can achieve progress will largely depend on the U.S. side. Washington needs to approach negotiations with a rational and pragmatic mindset— Xinhua news agency
The Hearth Conversation Another angle on the story
Why does a trade meeting in Paris matter more than the summit itself?
Because it's the rehearsal. If they can't agree on the details here—tariffs, rare earths, soybean quantities—then the Beijing meeting becomes theater. Both sides need to know what they're actually willing to concede before the cameras arrive.
The source mentions that China has been meeting its soybean commitments. So what's the real problem?
The problem is asymmetrical. China is buying soybeans as promised, but American companies still can't get the rare earth minerals they need. It's not a balanced trade. And now Trump is launching new investigations that could add tariffs on top of what already exists. That's not a gesture of good faith.
What does the Iran war have to do with any of this?
Oil. China gets 45 percent of its oil through the Strait of Hormuz, which is now at risk because of the conflict. If that strait closes, China's economy seizes up. So China is nervous, and nervous negotiators are less likely to make big concessions. They're focused on survival, not expansion.
The analysts seem pessimistic about a real breakthrough. Why would Trump even go to Beijing?
Because not going would be worse. A collapse in talks, a return to escalation—that would hurt both economies and destabilize the world. Sometimes the goal isn't to win. It's to not lose more than you already have.
What happens if these new investigations lead to more tariffs?
Then the truce falls apart. China retaliates, Trump responds, and you're back to the trade war that nearly broke global commerce. The investigations are leverage, but they're also a threat. Both sides understand that.
So what should we watch for in the coming weeks?
Whether China opens up rare earth exports to American aerospace and semiconductor firms. That's the real test. If they do, it means they're serious about stability. If they don't, it means they're just buying time until the next escalation.