China Now Holds the Whip Hand Over Trump: Natixis Macro Analysis

Natixis Corporate and Investment Banking · September 28, 2026

The recent US-China summit produced an underwhelming two-month trade truce extension, underscoring an increasingly unbalanced relationship in Beijing's favor. Constrained by rising US Treasury yields, inflation, and Gulf geopolitical crises, the US is poorly positioned ahead of the November APEC meeting in Shenzhen.

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Key Takeaways

1.China has gained significant leverage over the US as the Trump administration deals with domestic bond-market stress, inflation, and Middle East conflict commitments.
2.The bilateral summit produced underwhelming results, merely extending the trade truce and rare-earth export control suspension until January 10.
3.China holds the whip hand via dominance over rare earths and the threat of tariff escalation, positioning Beijing to demand major concessions at the upcoming November APEC summit.

Report data

Key figures extracted from this report

Metric	Estimate	Context
10-year U.S. Treasury Yield	5.1%	Jumped over 16 bps to above 5.1%, reaching its highest level since 2007 as Xi landed in the US.
Frozen Taiwan Arms Package	14 USD billion	Value of arms package to Taiwan that has been frozen since May.
Share of Known Rare-Earth Deposits	60%	Share of global known rare-earth deposits controlled by China.
Share of Rare-Earth Processing	90%	Share of global rare-earth processing controlled by China.
Average Tariffs on Chinese Goods	36.5%	Average bilateral tariffs imposed by the US on Chinese goods.