President Trump spoke about his relationship with Xi and the possibility of trade deals with China during his meeting with Australian Prime Minister Anthony Albanese this morning.
“I expect we’ll probably work out a very fair deal with President Xi of China,” Trump said Monday, as he repeatedly returned to his dynamics with China.
“They will threaten us with rare earths. I don’t think they’re threatening us too much right now, but they could do that,” Trump said.
“But I threaten them with something I think is much more powerful, and it’s tariffs.”
Trump’s words moved markets up and down (but not significantly)…
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1145ET *TRUMP: CHINA MAY PAY 155% TARIFF IF NO DEAL BY NOV 1 – Stocks down
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1155ET *TRUMP: WE’LL END UP WITH STRONG TRADE DEAL WITH CHINA – Stocks up
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1215ET *TRUMP: COULD THREATEN CHINA WITH AIRPLANE EXPORT CONTROLS – Stocks down
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1220ET *TRUMP: I WANT CHINA TO THRIVE – Stocks up
This follows comments late Sunday by President Trump, speaking aboard Air Force One while en route from Florida to Washington, telling reporters that rare earths, fentanyl, and soybeans would be key topics in his upcoming meeting with Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation (APEC) summit later this month.
The goal of the meeting is to defuse the latest round of trade war tensions between the world’s two largest economies, which have sent financial markets on a rollercoaster ride in recent weeks.
“I don’t want them playing the rare earth game with us,” Trump told reporters. Just days earlier, he warned that he would impose a 100% tariff on Chinese imports starting November 1 unless Beijing reverses its newly expanded export restrictions on rare-earth minerals and magnets. Goldman briefed clients on rare-earths and tariff threats on Sunday (read here).
The president noted that he wants Beijing “to stop with the fentanyl,” referring to his calls for the world’s second-largest economy to halt the export of fentanyl precursor chemicals fueling America’s drug crisis, which has led to 100,000 U.S. overdose deaths each year (read this). Some view the fentanyl trade as a form of “reverse opium war,” or, as we detailed in a recent note, part of a multifaceted “total war” against the U.S. that leverages next-generation weapons, including synthetic narcotics (e.g., fentanyl and cannabinoids), bioweapons (e.g., Covid-19), psychological manipulation and influence (e.g., TikTok), and a broad arsenal of irregular warfare tools.
Trump on what he wants from China:
–for them to restart buying soybeans “at least in the amount that they were buying before.”
— “to stop with the fentanyl.”
–“I don’t want them to play the rare earth game with us.”
It’s “very, you know, normal things,” he said on AF1. pic.twitter.com/wxGZFbuEkg— Jennifer Jacobs (@JenniferJJacobs) October 20, 2025
Another key demand Trump laid out on Air Force One ahead of his meeting with Xi is that Beijing resume soybean purchases. He said these three topics were all “very, you know, normal things.”
Soybeans have been a big issue in recent weeks:
This week, Treasury Secretary Scott Bessent is set to meet with China’s top trade negotiators in Malaysia, following a virtual meeting last Friday with Vice Premier He Lifeng that Chinese state media characterized as a “constructive exchange of views.” The talks are seen as a key pathway to de-escalating tensions ahead of the Trump–Xi meeting.
Bloomberg noted a regular press briefing in Beijing earlier today, where Chinese Foreign Ministry spokesman Guo Jiakun was asked about Trump’s three issues.
Jiakun responded by saying that a “trade war does not serve the interests of either party, and both sides should negotiate and resolve relevant issues on the basis of equality, respect and mutual benefit.”
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