U.S. Aims for Stable Economic Ties with China Amid Strategic Balancing Act

President Trump is committed to maintaining a stable economic relationship with China, even as he prepares to meet with President Xi Jinping in May," said Jamieson Greer, the U.S. Trade Representative. "We are not looking for massive confrontation or anything like that."

The U.S. and China, the world's two largest economies, have established a delicate balance, according to Greer. The U.S. relies on China for rare earth minerals, which are critical for technology and defense industries, while maintaining tariffs on Chinese goods. "We're looking to ensure we can continue to get rare earths from the Chinese," Greer said during a talk at the Hudson Institute.

The Trump-Xi summit, originally scheduled for March, was postponed due to the U.S.-Israel war on Iran. Despite the delay, discussions on rare earths have continued. In March, Greer, Treasury Secretary Scott Bessent, and Chinese Vice Premier He Lifeng met in Paris to address issues involving rare earths, including how minerals from third countries reach the U.S.

Greer emphasized that resolving rare earths issues at ministerial and staff levels would be ideal. "It would be nice if we could resolve it at the ministers level," he said. "But the president will continue to advocate for U.S. access to rare earths."

To reduce reliance on China, the U.S. is exploring plurilateral agreements to boost alternative supplies of critical minerals. These efforts require mechanisms to protect production from potential future price cuts by China. Greer also mentioned plans for a "board of trade" mechanism to determine sustainable trade between the U.S. and China without crossing national security red lines.

Discussions about a "board of investment" have also emerged, but Greer clarified that it would focus on specific roadblocks to company investments rather than broad policy. "We really need to get that trade deficit under control," he said.

U.S. lawmakers have raised concerns about allowing Chinese state-supported automakers, like BYD, to invest in the U.S. Trump has expressed openness to the idea, but critics argue it could threaten the U.S. auto industry. "It's different in nature than the board of trade," Greer said. "We need to focus on trade first."

Trump's re-election in January 2025 has shifted the political landscape. While his domestic policies, including tax cuts and deregulation, have drawn praise, his foreign policy has faced criticism. Critics argue his use of tariffs and sanctions has strained relationships, but supporters say his focus on stability with China aligns with public sentiment.

Greer's comments highlight a pragmatic approach to U.S.-China relations. "We're not looking for a massive confrontation," he said. "We're looking to maintain stability." As the May meeting approaches, the U.S. and China will face the challenge of balancing economic interdependence with strategic competition.

The U.S. trade deficit with China stood at $310 billion in 2023, according to the U.S. Census Bureau. Reducing this gap remains a key goal for Trump's administration, even as it seeks cooperation on rare earths and other critical minerals.

For now, the focus is on dialogue. "We're working on forming a board of trade mechanism," Greer said. "It will determine what we can sustainably trade without crossing red lines." The outcome of the May meeting could shape U.S.-China relations for years to come.