Analysis of the US-China Summit 'New Agreement': Discrepancies in Announcements and Rare Earth Implementation Risks
Executive Summary
During the US-China summit in Washington on September 24, President Xi Jinping declared a 'new joint agreement', but Beijing did not confirm the details. This discrepancy in announcements stems not from a communication error, but from a fundamental difference in negotiation objectives, with the US prioritizing visible deliverables and China emphasizing vague 'strategic stability'. In the rare earth supply chain, a structural asymmetry persists, with Beijing holding substantial authority to control the pace of implementation, making the decision on whether to extend the export restriction deadline of November 10 a key short-term observation. Despite friendly rhetoric in the diplomatic track, a dual structure of independent accumulation of technology controls on China by regulatory bodies such as the US Department of Commerce and the FCC continues. South Korean companies need to monitor and distinguish between verifiable agricultural and energy items and the less transparent rare earth and tariff items, adopting a dual strategy that incorporates both China's refining network and the US security-linked supply chain in core mineral procurement.
I. Issue Situation Analysis
Analysis of the US-China Summit: The Substance of the 'New Agreement' and Implementation Risks
1. Background and Progress
During President Trump's visit to Beijing in May, the agenda was framed around the '3Ts' of trade, technology, and Taiwan[3]. This same framework was repeated in the Washington summit[3]. Washington prepared unusual honors, including airport receptions, a White House welcome ceremony, and a state dinner format that included a review by the honor guard in the Rose Garden[6].
Prior to the summit, there was ongoing coordination among the working-level officials of both countries. US Treasury Secretary Mnuchin and Chinese Vice Premier He Lifeng met at JP Morgan's headquarters in New York on September 20[10]. Discussions included the renewal of the Busan Agreement and the establishment of a US-China Board of Trade[10]. It was confirmed that the Chinese side presented a new idea of a 'bigger agreement'[17]. Secretary Mnuchin stated, "On Sunday, the Chinese side brought the idea of a bigger agreement"[17]. He also mentioned that he was open to both continuing the Busan Agreement as is and considering the bigger agreement[17].
The rare earth issue had already become contentious before the summit. On September 21, the Chinese Foreign Ministry was asked whether Beijing had "fully resumed" rare earth supplies and whether the November 10 deadline or expanded export restrictions could be extended[4]. The Chinese response was cautious, merely reiterating a principled stance of maintaining the safety and stability of global industrial and supply chains[4].
2. Current Situation
The manner in which both sides announced the results of the summit showed a clear temperature difference. President Trump described the meeting as "a great meeting" and emphasized his "truly great friendship" with Xi[15][18]. President Xi stated that the US and China had reached a 'new joint agreement' on trade. However, according to CFR analysis, Beijing did not confirm the specific details of this announcement[5]. It is considered unusual for such divergent explanations to emerge just hours after the conclusion of a summit[5].
In the agricultural export sector, some progress has been observed[5]. China has fulfilled more than half of its commitment to purchase 25 million tons of US soybeans this year[19]. However, there are concerns that the implementation of separately promised spending commitments has been sluggish[19]. The issue regarding Boeing aircraft is reported to be effectively on hold due to disagreements over parts[5].
The rare earth issue is still considered to be in a state of 'unresolved relief'[4]. The US side has protested that exports of key items such as yttrium have sharply decreased contrary to promises[8]. However, the structural reality is that Beijing holds the practical authority to control the pace of implementation[8]. The precedent of China using rare earth and magnet export controls as leverage to induce tariff concessions from Washington in the 2025 tariff phase underpins this asymmetry[8]. EAI analysis concludes that "years of tariffs on China have not reduced the actual dependence on the refining and processing stages, so this asymmetrical structure is unlikely to be resolved in the short term"[8].
The Taiwan issue was sidelined and left unresolved. According to Xinhua, President Xi urged the US to "oppose Taiwan independence" during the summit[16]. The White House did not immediately respond to this request[16].
3. Key Actors and Positions
China (Xi Jinping Administration)has set the prevention of reigniting the trade war and maintaining 'strategic stability' in relations as its top priorities[1][14]. President Xi emphasized that "the interests of both the US and China are deeply intertwined and there is great potential for cooperation"[13]. He also added a conciliatory gesture by stating that he would invite 100,000 American youth for exchanges and study over the next five years[13]. The rare earth card is maintained as a key asset for negotiation, but the timing and pace of implementation continue to follow the existing pattern controlled by Beijing[8].
The United States (Trump Administration)focused on securing visible outcomes for domestic political purposes. Tariff reductions, expanded purchases of agricultural products and energy from China, stable access to critical minerals, and new commercial contracts were identified as the desired outcomes for Washington[7]. Secretary Mnuchin and USTR Representative Greer took the lead in practical negotiations[10]. They discussed economic issues and AI safety dialogues with Vice Premier He Lifeng in New York[10].
The hardliners in the US Congressact as structural constraints on the sustainability of agreements between the leaders. There is a continuing trend to pressure the reduction of presidential discretion, raising concerns about the short political lifespan of the agreement's contents[6].
US regulatory bodies such as the Department of Commerce and the FCCoperate separately from the diplomatic track. A dual structure of independently accumulating technology control measures on China is maintained[3][6]. This is pointed out as a factor limiting the effectiveness of agreements between the leaders[6].
4. Key Issues
The first issue is the substance of the 'new joint agreement'. Contrary to President Xi's announcement, there was no official confirmation from the Beijing government[5]. It remains unclear whether it is merely an extension of the Busan Agreement or if it has been elevated to the 'bigger agreement' mentioned by Secretary Mnuchin[17].
The second issue is the verifiability of rare earth implementation. As the November 10 deadline approaches, the decision on whether to ease or expand export controls remains undecided[4]. Whether the actual export volumes of individual items such as yttrium align with commitments will remain a potential trigger for renewed conflict[8].
The third issue is the structural unresolved nature of the Taiwan issue. This is a matter where Beijing's red lines and Washington's domestic legal obligations collide, making a fundamental resolution difficult[3]. This issue was also not brought to the negotiation table and was deferred in this summit[16].
The fourth issue is the gap between the diplomatic and regulatory tracks. Despite the friendly rhetoric at the White House level, practical measures for controlling China by regulatory bodies such as the Department of Commerce and the FCC are expected to continue independently[6]. As long as this dual structure persists, the 'agreement' between the leaders is likely to remain at a symbolic level.
II. In-Depth Analysis of the Issues
In-Depth Analysis of the US-China Summit: Structural Origins of the 'New Agreement' and Implementation Risks
1. Analysis of Root Causes
It is difficult to say that the negotiation objectives of both sides were aligned. The US wanted visible outcomes that President Trump could present domestically. This included tariff reductions, expanded purchases of agricultural products and energy from China, stable supply of critical minerals, and new commercial contracts[7]. In contrast, China prioritized 'strategic stability' in relations over specific implementation items[1][14]. The reason President Xi chose the broad language of 'new joint agreement' after the summit and Beijing's refusal to confirm the details lies here[5]. From Beijing's perspective, an ambiguous agreement is actually advantageous. By not pinning down specific figures, it can avoid controversies over accountability for implementation failures.
The root cause of the rare earth issue is more structural. The US protests that exports of items such as yttrium have sharply decreased contrary to promises[8]. However, the authority to effectively control the pace of implementation has always rested with Beijing. The precedent of China using rare earth and magnet export controls as leverage to induce tariff concessions from Washington in the 2025 tariff phase created this asymmetry[8]. The Busan Agreement is a product of this. It was a deal where China eased mineral export restrictions in exchange for Washington lowering tariffs[8]. In this context, Beijing has a greater incentive to slow down the pace of implementation than to violate the agreement. There is no reason to rush for full implementation.
2. Structural Context
Political Structure: Asymmetry of Domestic Political Timelines
For President Trump, there is an urgent need to show results to his domestic support base. Expanding agricultural purchases is a card aimed at voters in the agricultural Midwest[7]. In contrast, President Xi has relatively less urgency regarding domestic political timelines. The pressure for short-term results in the Communist Party system is not as great as in the US presidential system. This asymmetry is reflected at the negotiation table. The US side is fixated on specific deliverables, while the Chinese side maintains an abstract frame of 'stable relations'[1].
Economic Structure: Asymmetry of Supply Chain Dependence
Tariffs are a symmetrical weapon that both countries can impose on each other. However, critical minerals are an asymmetrical weapon. According to PIIE analysis, years of tariffs on China have not reduced the actual dependence on the refining and processing stages[8]. While US tariffs can impact the volume of exports from China to the US, China's export controls can paralyze the supply chains of US manufacturing. This asymmetry means that the practical leverage at the negotiation table is tilted towards Beijing. The confidence expressed by the US Treasury Secretary when he asked, "What do we lose if China raises tariffs?"[8] became dulled in the actual negotiation phase in the face of the rare earth card.
Security Structure: Separation of Diplomatic and Regulatory Tracks
Separate from the agreements between the leaders, US regulatory bodies such as the Department of Commerce and the FCC are independently accumulating technology control measures on China[3][6]. This is a dual structure. While friendly language is exchanged in the diplomatic track, practical sanctions are being accumulated separately in the regulatory track. Even as Trump and President Xi mention a "great friendship" at the White House[15][18], Washington's bureaucratic organizations are fulfilling legal obligations regarding Taiwan issues and technology transfers. This structure, where agreements between leaders do not immediately change the administrative practices of subordinate agencies, fundamentally constrains the effectiveness of the agreements.
3. Comparison with Historical Precedents
This case has a strong character of being a renewal of the 2025 Busan Agreement[8][10]. The Busan Agreement was also a deal where China eased rare earth export restrictions in exchange for US tariff reductions. However, during the implementation phase, there were repeated instances where the supply of individual items such as yttrium did not align with commitments[8]. The Washington agreement may follow the same pattern. It declares an agreement in broad language, but friction may arise again during the detailed implementation phase.
Comparisons with the May Beijing summit are also valid. The Washington summit was planned as a follow-up to the May agreement[3][6]. At that time, the agenda was framed around the '3Ts' of tariffs, technology, and Taiwan[3]. However, the Taiwan issue was fundamentally unresolved and was carried over into this summit as well[16]. President Xi again demanded that the US oppose 'Taiwan independence'[16]. The AI safety dialogue also did not resolve disagreements over definitions[3]. Each time the summit is repeated, the core issues remain unresolved and are carried over to the next meeting.
The proposal for a US-China Board of Trade is also a noteworthy precedent[10]. It attempts to institutionalize a mechanism for tariff reductions, but there have been limited precedents for such permanent organizations to operate effectively. It is likely to follow a similar trajectory to the past US-China Strategic Economic Dialogue (S&ED), which initially launched as an institutionalized dialogue channel but became ineffective as political tensions escalated.
4. Key Variables Shaping Issue Development
The first variable is the November 10 deadline for rare earth export restrictions[4]. The Chinese Foreign Ministry avoided giving a clear answer about the extension of this deadline even up to the summit[4]. How this deadline is actually handled will be the first test of assessing the substance of the 'new agreement'.
The second variable is the pace of soybean purchases. China has fulfilled more than half of its commitment to purchase 25 million tons of US soybeans this year[19]. However, the implementation of separate spending commitments has been sluggish[19]. Whether the selective purchasing pattern continues or transitions to full implementation will directly impact US domestic political calculations.
The third variable is the Boeing aircraft contract. It is effectively on hold due to disagreements over parts[5]. Whether this issue is resolved will serve as an indicator of whether the 'bigger agreement' has substantive content.
The fourth variable is the gap between the diplomatic and regulatory tracks. If technology controls by the Department of Commerce and the FCC continue to accumulate independently of the friendly atmosphere between the leaders[3][6], the political lifespan of this agreement will inevitably be short. The pressure from hardliners in the US Congress is also a variable. If legislative attempts to reduce the discretion of the executive branch continue, the sustainability of the agreement itself may be shaken[6].
The fifth variable is whether Beijing's proposal for a 'bigger agreement' develops into a concrete document[17]. Whether this idea mentioned by Secretary Mnuchin remains a simple extension of the Busan Agreement or materializes into a separate agreement with a new implementation mechanism will likely be determined in the upcoming weeks of practical negotiations.
III. Final Recommended Response Measures
Follow-up Response Measures after the US-China Summit: Managing Implementation Risks and Dual Strategies
1. Comprehensive Assessment and Recommended Response Measures
The Washington summit highlighted discrepancies in the manner of announcements rather than the substance of outcomes. President Xi declared a 'new joint agreement', but Beijing did not confirm the details[5]. It is unusual for such differences in explanation to arise just hours after the conclusion of a summit[5]. This discrepancy itself foreshadows risks in the upcoming implementation phase.
The basic principle for the South Korean government and companies is clear. They must track the symbolic language of the diplomatic track separately from the actual progress in the practical implementation track. Even as President Trump mentions a "great friendship"[18], regulatory bodies such as the US Department of Commerce and the FCC continue to accumulate technology controls on China independently[3][6]. This dual structure is likely to persist even after this agreement.
In the core mineral supply chain, reducing dependence on a single source is effective. The US side protests that exports of items such as yttrium have sharply decreased contrary to promises, but the authority to control the pace of implementation still rests with Beijing[8]. This asymmetrical structure will not be resolved in the short term. South Korean companies need a dual strategy that maintains the use of China's refining network while simultaneously entering the US security-linked supply chain[8].
They should monitor and distinguish between verifiable items such as agricultural and energy purchase commitments and items like rare earths and tariffs, where the pace of implementation is unclear. China has fulfilled more than half of its commitment to purchase 25 million tons of soybeans[19], but separate spending commitments have been sluggish[19]. The Boeing aircraft issue is effectively on hold due to disagreements over parts[5]. Such discrepancies in implementation by item are likely to recur in the coming months.
2. Short-term/Mid-term/Long-term Action Plans
Short-term (1-3 months)
The extension of the November 10 deadline for expanded rare earth export restrictions should be the top priority for confirmation[4]. The Chinese Foreign Ministry maintained a cautious response regarding this deadline extension even up to the summit[4]. After the summit, it is necessary to compare Beijing's official statements with the announcements from the Department of Commerce to check whether actual easing measures are forthcoming.
It is also a short-term observation target to see whether the renewal of the Busan Agreement or the 'bigger deal' concept is finalized. Secretary Mnuchin stated before the summit that he was open to both continuing the Busan Agreement as is and considering the bigger agreement[17]. Depending on this choice, the tariff structure and mineral export conditions may change. Companies involved in semiconductor and secondary battery raw material procurement need to estimate the cost impacts of both scenarios in advance.
Mid-term (3-6 months)
The specifics of discussions regarding the establishment of the US-China Board of Trade should be tracked[10]. If this body becomes operational, there is a possibility that the mechanism for tariff reductions will be institutionalized. Conversely, if discussions falter, it can be interpreted as a signal that there will be no progress beyond the Busan Agreement.
Quarterly checks on the export volume statistics of individual critical mineral items such as yttrium should be conducted[8]. Whether US protests are repeated or actual volume recovery is confirmed will change the nature of supply chain risks. South Korean companies can use these statistics as leading indicators for their procurement plans.
Long-term (6 months to 1 year)
Trends among hardliners in the US Congress regarding China should be continuously monitored. Agreements between leaders are established at the discretion of the executive branch, but if Congress attempts to reduce the president's discretion through legislation, the political sustainability of the agreement may be shaken. The Taiwan issue remains a structural matter where Beijing's red lines and Washington's domestic legal obligations collide, and it was fundamentally unresolved in this summit as well. President Xi demanded that the US oppose 'Taiwan independence' during the summit[16]. This issue should be reflected in long-term scenarios as a variable that influences the overall stability of relations, separate from trade agendas.
3. Monitoring Indicators and Trigger Points
In terms of trade implementation, three indicators should be prioritized for tracking. The first is whether there will be an actual announcement of an extension or easing of the rare earth export restriction deadline on November 10[4]. The second is the pace at which China's soybean purchase performance approaches the annual commitment of 25 million tons[19]. The third is the monthly export statistics of individual mineral items such as yttrium to the US[8].
In political terms, trends in hardline legislative proposals in the US Congress regarding China and the frequency of announcements of individual technology control measures by the Department of Commerce and the FCC should be tracked together[3][6]. If sanctions continue to accumulate in the regulatory track while friendly announcements continue in the diplomatic track, this can be interpreted as a signal that the effectiveness of the agreement is limited.
The trigger points can be condensed into two scenarios. One is if the rare earth deadline extension fails and the US responds with a tariff re-increase. In this case, the Busan Agreement system itself would be shaken, necessitating the immediate activation of supply chain contingency plans. The other is if Beijing's red line, set as a condition for maintaining the summit, is violated in relation to Taiwan. In this case, the implementation of agreements in the trade track is also likely to be delayed.
4. Summary Conclusion
The Washington summit merely reaffirmed the trend of managed competition without resolving structural issues. The discrepancy between President Xi's announcement of a 'new joint agreement' and Beijing's lack of confirmation of details[5] foreshadows the likelihood that both sides will adopt interpretations favorable to themselves in the future. The South Korean government and companies should not rely on the symbolic language of diplomatic discourse but should independently track the implementation status through verifiable indicators such as rare earth export statistics, agricultural purchase performance, and regulatory agency actions. In terms of supply chains, a dual strategy that utilizes both China's refining network and the US security-linked network, and in terms of trade, a selective response that distinguishes between verifiable and opaque items, is currently the most realistic option.
References
[1] [Hankyoreh] Trump-Xi Meeting on 24th... US 'Outcomes' and China's 'Stability' Priorities
[4] [The Diplomat] Rare Earths at the Trump-Xi Summit: Relief Without a Resolution
[5] [Council on Foreign Relations (CFR)] Ten Issues to Watch at the Trump-Xi Summit in Washington
[7] [South China Morning Post] Success of Trump-Xi Summit Lies in What Happens Afterwards
[9] [Hankyoreh] US-China Summit: 'AI' and 'Tariffs' Major Agenda... US Big Tech CEOs Attend Dinner
[11] [Nikkei Asia] Trump-Xi Summit Live: US President Hosts State Dinner with Tech Leaders
[12] [Nikkei Asia] Trump-Xi Summit Live: US President Hosts State Dinner with Tech Leaders
[16] [Cyprus Mail] Trump-Xi Summit in Washington Begins with Great Fanfare but Low Expectations
[18] [The Globe and Mail] Trump Rolls Out the Red Carpet for China’s Xi as Both Sides Seek Stability
[19] [The Edge Malaysia] China’s Selective Crop Buying Tests US Trade Truce Before Summit
[21] [Nikkei Asia] Trump and Xi Set to Talk Trade and AI as Truce Hangs in Balance
[22] [Business Times (SG)] The Trump-Xi Summit Will Be a Maintenance Check, Not a Breakthrough
[24] [Ámbito Financiero] US and China Extended the Trade Truce Until January
[25] [Business Times (SG)] Xi Rolls into Trump Summit with China’s Trade Engine Roaring
*This text is an AI translation of an original written in Korean. Some translations or nuances may be inaccurate.
This report is an in-depth analysis planned by an EAI researcher, grounded in sophisticated AI-assisted research, and finalized by the EAI researcher.
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