Rare earths, soybeans and Trump’s twin missions for trade and peace

Graphics: TBS

Donald Trump's renewed scramble for rare earths is shaping much of his foreign policy. Wherever he travels, signing deals on critical minerals, vital for industries from semiconductors to electric vehicles, appears high on his agenda.

His Asia tour, which took him to the ASEAN summit in Malaysia on the first leg, was officially about rallying allies to counter China's growing military and strategic presence in the region. But securing alternative supplies of rare earths, where China holds a near-monopoly, was never far from his mind. 

Beijing recently expanded export restrictions on these minerals, citing concerns over their use in sensitive sectors. It was widely seen as retaliation for Trump's steep tariff hikes, and it has intensified Washington's urgency to diversify supply chains.

In Kuala Lumpur, Trump struck a framework agreement with Malaysia to expedite its rare-earth development and ensure US firms face no export barriers. Malaysia, estimated to hold 16 million tonnes of rare earth deposits, halted unprocessed rare mineral exports last year.

Next, in Japan, Trump pursued a similar commitment on rare earth supply. This came on the heels of a deal earlier this month with Australia to boost critical minerals exports to the US.

China's boycott of US soybeans also emerged as a powerful bargaining chip. Beijing normally buys more than half of US-grown soybeans, worth about $13 billion last year, but halted purchases during the tariff conflict, alarming American farmers.

Treasury Secretary Scott Bessett, who labelled himself as a "soybean farmer," shared his "pain" over China's refusal to buy American soybeans.

Both rare earths and soybeans were among the factors that might have influenced Washington's stance on China and created scope to revive negotiations.

Trump's Asia mission has thus raised hopes of repairing strained ties, both with allies and adversaries in the region, as sweeping new US tariffs on Chinese goods, set at 100%, were due to begin 1 November.

China's boycott of US soybeans emerged as a powerful bargaining chip. Beijing normally buys more than half of US-grown soybeans, worth about $13 billion last year, but halted purchases during the tariff conflict, alarming American farmers.

Before leaving Malaysia, Trump told reporters aboard Air Force One that the US and China were close to a trade breakthrough ahead of his meeting with Xi Jinping in Seoul. He also hinted at progress on TikTok, another long-standing flashpoint.

Trade bargaining goes beyond Asia

Beyond Japan and Malaysia, Trump engaged three more ASEAN members, Cambodia, Thailand and Vietnam, in rapid-fire talks. These countries currently face 19-20% tariffs on their US exports. Trump hopes new deals will expand access for American agriculture, energy and aviation products.

India also featured prominently. Before flying from Malaysia to Japan, Trump cited his recent phone call with Prime Minister Narendra Modi, who signalled New Delhi could reduce Russian oil imports, an issue that had prompted Trump to raise tariffs on Indian goods to as high as 50%. 

Indian media say that the country is willing to cut Russian oil purchases and allow more US cotton imports; a trade deal with the US is likely, which may see US tariffs lowered to 15-16%.

Trump's negotiations also stretched beyond Asia. 

Brazilian President Lula da Silva, who was also in Malaysia, suggested his recent talks with Trump went well and a quick deal was likely. The US had imposed 50% tariffs on Brazilian goods, accusing Lula of unfair treatment of a key opposition figure.

Trump as peace envoy

Alongside trade diplomacy, Trump worked to reinforce his self-styled image as a "global peace broker". He announced an extension of the ceasefire he helped arrange in July between Thailand and Cambodia over border clashes.

In Japan, meeting newly elected Prime Minister Sanae Takaichi, Trump emphasised regional security and deterrence against China. The two leaders pledged closer defence coordination as Beijing steps up military drills in the South China Sea and pressure on Taiwan.

Trump will conclude his trip at the APEC summit in Seoul, where his high-stakes meeting with Xi is expected to dominate global attention.

Did the tit-for-tat strategy work?

News of a "substantial framework" clearing the path for the Trump-Xi Seoul meeting triggered an immediate surge in Chinese markets. Shanghai's benchmark index touched a decade high, while broader Asian and US stock futures also gained, a sign that global businesses want to overcome the fatigue over prolonged trade disputes.

Yet the path to Seoul was anything but smooth. 

The US and China spent months in a tit-for-tat escalation: Washington threatened and imposed steep tariffs and port fees; Beijing hit back with restrictions on rare earths and soybeans. The White House quickly learnt its strategy was not delivering the expected pressure. China responded more aggressively than defensively, and increasingly appeared to hold the upper hand.

China's manufacturing engine has not slowed. Its Q3 GDP grew 4.8% year-on-year, and Chinese equities have outperformed US blue chips in the S&P 500. The country has also strengthened its dominance in high-tech manufacturing, far beyond where it was seven years ago when Trump, in his first term, launched a trade war.

Its hold on rare earths alone can disrupt global supply chains. And with aggressive expansion of production and deepened commercial ties, China is now the largest, most competitive trading partner for some 70 countries. For many developing economies, including Bangladesh, China remains the primary source of industrial raw materials and affordable consumer goods.

Bigger victory is a trade truce

No one truly "wins" a trade war. When global giants clash, smaller economies suffer the most, facing costlier imports, weaker exports and destabilised investment flows. The world is watching Seoul in hopes that the two largest economies can ease tensions and restore predictability to global trade.

Even a limited truce or a slowdown in the tariff spiral offers relief far beyond Washington and Beijing.

For Trump, rare earth deals and soybean diplomacy may help secure support from both industry and farmers at home. For Xi, resisting US pressure while reopening trade channels strengthens China's position as an indispensable global economic force.

Both leaders now have incentives to claim a strategic victory. But the bigger victory would be sparing the world from further trade turmoil.