Thoughts From The Divide: Know when to Fold‘Em
Posted on June 12, 2025
Its been a shockingly busy news week, what with riots in LA, another horrible Boeing crash in India, and speculation of Israeli military action against Iran. But perhaps the most important story was the round of US-China trade talks in London. The President gave us early warning of another successful negotiation from his Truth Social Account. President Trump told us that the U.S. would get “a total of 55% tariffs” with China’s tariffs set at 10%, adding that “Full magnets and any necessary rare earths, will be supplied, up front, by China. Likewise, we will provide to China what was agreed to”. A Chinese spokesman was more reserved. Lutnick referred to the agreement as a “handshake for a framework” which didn’t seem entirely consistent with Trump’s assessment. Usually, in these matters the best way of telling what happened is to look at the US-listed Rare Earth miners – MP Materials fell 8% yesterday, but was up 14% today, which might suggests that the market the market remains skeptical about China resuming rare earth supplies. We are often accused of being cynical, which may explain why we can’t shake the suspicion that the Chinese authorities are slow-walking negotiations on Rare Earth supply. Their stated position is that they will supply for civilian use but not military. Is an acceptable compromise with the US possible? Who has the better hand?