Agriculture, Energy, and Rare Earths in Focus Ahead of U.S.-China Summit

Commodity markets are closely watching the upcoming summit between U.S. President Donald Trump and Chinese President Xi Jinping, as key sectors like agriculture, energy, and rare earths remain central bargaining chips in the trade dispute between the two economic superpowers. The meeting in Washington next week could yield significant breakthroughs or renewed tensions for traders, according to a Reuters report.

Agriculture Deals on the Table

Agricultural goods represent a major component of U.S.-China trade, with American exports to China reaching $29 billion in 2024. This sector is widely seen as a likely area for agreement.

The White House has previously stated that China agreed to purchase 25 million metric tons of U.S. soybeans annually through 2028. According to U.S. officials, Beijing also committed to an additional $17 billion in other agricultural product purchases, though Beijing has not publicly acknowledged these agreements.

Analysts anticipate potential waivers on a final 10% tariff on agricultural imports to help facilitate these sales. Earlier this month, U.S. Trade Representative Jamieson Greer suggested there could be announcements to incentivize U.S. agricultural exports to China, with sorghum and corn seen as likely candidates alongside soybeans.

Energy Tariffs and Sanctions

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U.S. energy exports to China, which previously ranged from $7.5 billion to $12 billion annually, were halted last year after Beijing imposed retaliatory tariffs of 10% to 15%. A breakthrough could come from a $30 billion package of reciprocal tariff cuts that, according to a Bloomberg report, may include energy.

However, a resumption of trade may not immediately translate into a major windfall for U.S. LNG producers. The report notes that even with tariffs in place, some Chinese buyers are fulfilling long-term contracts but reselling the cargoes on the global market instead of importing them.

The Rare Earths Sticking Point

China's control over the production of rare earths—materials critical for the aerospace and semiconductor industries—remains a significant point of contention. Beijing's previous decision to limit exports was a key factor in bringing the U.S. to the negotiating table.

While more materials are now flowing from China, Reuters has reported the issue is not fully resolved. U.S. firms in sensitive sectors still face access challenges, and U.S. officials are expected to press Beijing to honor its commitments to ensure a stable supply.