Top U.S. and Chinese officials converged in Malaysia on October 25, 2025, seeking to cool simmering tensions over rare earth exports and looming tariffs, as the world’s two largest economies edge toward a critical summit between Donald Trump and Xi Jinping later this week. According to Financial Times, Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng described their negotiations as “constructive,” yet deep divisions remain—especially over China’s sweeping export controls on rare earths, the minerals essential for everything from smartphones to electric vehicles and missile guidance systems.
Behind closed doors, the stakes couldn’t be higher. If the summit scheduled for October 30 fails to yield a breakthrough, U.S. tariffs on Chinese goods are set to soar to a staggering 157%. That’s a number that has both Wall Street and global manufacturers on edge. “We’re at 157% tariff for them. I don’t think that’s sustainable for them. They want to get that down, and we want certain things from them,” Trump told reporters aboard Air Force One en route to Malaysia, signaling a rare willingness to compromise. “Sure they’ll have to make concessions. I guess we will too.”
China’s hardline stance on critical mineral exports has triggered a fierce backlash not just from Washington, but also from Europe and Japan. According to Yardeni Research, Beijing’s latest move “may be tipping the geostrategic balance back toward the US as companies around the world think better of doing business in China generally.” The Group of Seven (G7) nations have responded by vowing a united front against China’s export controls, a striking shift for an administration often accused of acting unilaterally.
European Commission President Ursula von der Leyen, speaking in Berlin on October 25, announced the EU’s new RESourceEU initiative—a sweeping plan to curb the bloc’s dependence on Chinese raw materials. “The aim is to secure access to alternative sources of critical raw materials in the short, medium and long term for our European industries,” von der Leyen declared, as reported by Reuters. The EU intends to accelerate partnerships with countries like Australia, Canada, Chile, Greenland, Kazakhstan, Uzbekistan, and Ukraine, while also investing in recycling and domestic production. “If you consider that over 90% of our consumption of rare earth magnets comes from imports from China, you see the risks here for Europe and its most strategic industrial sectors,” she said.
The urgency is palpable. On October 9, China imposed new export restrictions on rare earths and battery materials, a move widely interpreted as retaliation for U.S. tariffs and technology restrictions. But von der Leyen pointed out that the impact extends far beyond the United States, affecting European industries in automotive, defense, aerospace, AI chips, and data centers. “In the short term, we are focusing on finding solutions with our Chinese counterparts. But we are ready to use all of the instruments in our toolbox to respond if needed,” she warned.
For its part, the U.S. is scrambling to secure alternative rare earth supplies, particularly from Australia, though analysts caution that new sources could take years to come online. Meanwhile, the Trump administration is working closely with allies—including Australia, Canada, India, and other Asian democracies—to develop a coordinated response. “We will focus on everything from joint purchasing to stockpiling. We will boost investment in strategic projects for the production and processing of critical raw materials here in the European Union,” von der Leyen added, drawing a clear parallel to the EU’s earlier REPowerEU plan to reduce reliance on Russian energy after the Ukraine invasion.
Yet, the trade standoff is hardly limited to minerals. Earlier this week, Simply Wall St reported that the Trump administration is considering new restrictions on U.S. software exports to China, raising fresh concerns for technology firms on both sides of the Pacific. The prospect of tighter controls has rattled the software industry and injected uncertainty into the investment outlook for companies like Doximity—though the platform’s core U.S.-focused business and AI tool rollout appear insulated for now. “The newly proposed US software export controls targeting China do not appear to present a material, near-term risk to Doximity’s core US-focused business or its most significant catalyst, continued rollout and adoption of AI tools like Scribe, although regulatory volatility remains a background concern for the wider sector,” Simply Wall St noted.
Doximity, for its part, has projected robust growth—targeting $805.8 million in revenue and $280.5 million in earnings by 2028, which would require 11% yearly revenue growth. The company’s recent buyback of over 4.1 million shares for nearly $200 million underscores management’s confidence in the business, even as the broader tech sector braces for potential fallout from the U.S.-China trade rift.
China, meanwhile, has not stood idle. Beijing has blasted U.S. efforts to limit software and chip exports and is actively redirecting trade flows to other countries to offset the plunge in exports to America. According to Financial Times, “Xi’s latest trade war tactic may be tipping the geostrategic balance back toward the US as companies around the world think better of doing business in China generally.”
The global response has been swift and coordinated. The U.S., EU, and G7 are working overtime to reduce their reliance on Chinese minerals and technology, with joint purchasing, stockpiling, and massive new investments in domestic and allied supply chains. The EU’s RESourceEU plan is just the latest salvo in a wider effort to safeguard critical industries from future supply shocks.
Still, the path forward is fraught with uncertainty. The U.S. is eager to reach a deal with China to avoid the economic pain of 157% tariffs, but both sides remain wary. Trump’s softened rhetoric—“I’m not looking to destroy China”—hints at a possible compromise, though the details remain elusive. As the world waits for the outcome of the Trump-Xi summit, businesses and policymakers alike are bracing for whatever comes next.
For now, the rare earth standoff has become a defining test of economic resilience and diplomatic ingenuity. With global supply chains in flux and geopolitical alliances shifting, the outcome of this week’s summit could shape the future of technology, manufacturing, and international trade for years to come.
