US-China economic chiefs meet in Paris to prepare for Trump-Xi summit
High-stakes talks focus on tariffs, rare earth access and technology export controls
Senior economic officials from the United States and China convened in Paris on Saturday for critical trade discussions that could reshape commercial relations between the world's two largest economies. The meetings, aimed at preparing for a potential summit between President Donald Trump and President Xi Jinping, come as both nations grapple with deteriorating trust in the wake of tariff escalations and strategic technology controls.
US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are leading delegations at the Organisation for Economic Co-operation and Development headquarters, with US Trade Representative Jamieson Greer also participating. The talks address three flashpoints: tariffs on billions of dollars of goods, access to critical rare earth minerals, and American export controls on advanced technologies.
The stakes are particularly high for global supply chains. China dominates the production and refining of rare earth elements, which are essential for defense systems, electric vehicles, semiconductors and consumer electronics. According to industry analysis, the United States' strategic stockpiles of these materials may last only two months at current consumption rates, giving Beijing significant leverage in negotiations.
Tensions have mounted since President Trump implemented a 10% global tariff and launched new Section 301 investigations into Chinese trade practices, including maritime, logistics and shipbuilding sectors. Chinese officials have warned that new US tariffs could trigger retaliatory measures, including export restrictions on rare earths and a suspension of agricultural imports.
The Paris talks represent an effort to salvage the fragile "Busan trade truce" agreed by Trump and Xi in October 2025. That agreement included commitments from China to eliminate export controls on rare earth elements and other critical minerals for one year, while the United States lowered certain tariffs and suspended heightened reciprocal tariffs through November 2026.
Financial markets are watching closely. MP Materials, the largest US rare earth mining company, saw its shares decline 4.7% to $57.21 on Friday, reflecting investor anxiety about potential supply disruptions. Despite the stock's pullback, analysts maintain a strong consensus buy rating on the company, with an average target price of $78.50, according to market data.
The automotive, defense and technology sectors face the most direct exposure. Electric vehicle manufacturers rely on rare earth-based permanent magnets for motors, while defense contractors depend on the materials for guidance systems and radar components. Semiconductor manufacturers are similarly vulnerable to export controls that limit access to advanced equipment and markets.
Beyond the specific trade issues, the Paris discussions carry broader implications for global economic stability. The International Monetary Fund has warned that prolonged trade tensions between the US and China could reduce global GDP by more than 1.5 percentage points over the next five years, with emerging markets bearing the brunt of slower growth.
The outcome of these preliminary talks will likely determine whether Trump and Xi proceed with their planned summit in Beijing later this month. Both administrations face domestic pressures: Trump confronting agricultural and manufacturing constituencies concerned about Chinese retaliation, and Xi balancing economic reform objectives against nationalist sentiment demanding stronger responses to US technology restrictions.
For investors and corporations alike, the Paris meetings offer a rare window into the future direction of US-China economic relations. With American midterm elections approaching later in 2026 and China implementing its 15th Five-Year Plan, both nations have political incentives to reach at least temporary agreements to stabilize commercial ties, even as fundamental strategic competition continues.