Australian exporters will be holding their breath hoping a rare earth deal today between Donald Trump and Anthony Albanese won’t bring a trade ban blitz from Beijing.

The Prime Minister has found a ‘rare’ opportunity to get the attention of President Donald Trump, with his much-anticipated meeting in Washington today. But the topic for discussion i.e., guaranteeing prices for rare earths and other critical minerals, could get him in a lot of trouble with our most important export customer, China!

And we know a cranky China has no problem getting even with tariffs and trade bans, so there could be challenging times ahead for the likes our many exporters, including Rio Tinto and, of course, BHP, which is currently in a battle with Beijing over the price of iron ore.

In case you missed this, abc.net.au summed up the price battle between BHP and the iron ore buyer called China Mineral Resources Group (CMRG) this way: “China has long wanted to exert more control over the price it pays for iron ore, particularly as its steel makers face narrowing margins and Australian mines make the inevitable transition to a lower-grade product.”

This encounter between the world’s biggest buyer of iron ore and BHP, the biggest supplier, is seen as a test case for the world’s second biggest economy, which recently sought to put licences on the purchasing and use of its rare earths. This led to President Trump threatening 100% tariffs on Chinese exports to the US.

At the time, Mr Trump said it was wrong for one country to control the supply of rare earths and as a reaction, said this: “I was to meet President Xi in two weeks, at APEC, in South Korea, but now there seems to be no reason to do so”.

While he later backtracked on this threat, who knows where he’s at on this meeting. All this puts a serious spotlight on what Trump and Albanese agree to and then how Beijing responds. In fact, as of Friday, the President was indicating he’d meet Xi.

Right now, our Government is proposing a $1.2 billion national critical minerals strategic reserve, which makes sense given rare earths are used in smartphones, jet engines, MRI equipment, wind turbines and many hi-tech products.

Our leading supplier of rare earths, Lynas Rare Earths, has seen its share price spike a whopping 147% over the past year to $19.24. This company and its shareholders will be very keen to see what the two leaders agree to today.

However, shareholders of the likes of BHP and producers of other exports that go to China will be holding their breath to see how China reacts to any agreement between Trump and our PM.

The Australian Financial Review says “G7 member countries have separately discussed putting in place price floors for rare earths produced in allied countries, which may extend to Australia, to counter China’s dominance and provide an incentive to producers, according to Reuters.”

The Government is being told by the likes of Nicola Beer, vice president of the European Investment Bank, that Australia must not let fear of repercussions stand in the way of new minerals deals.

“I think to be afraid, to be scared, is not good guidance. To be stable on your own feet is the best way to start,” Beer told the AFR . “What we do not want to be is blackmailed by restrictions on one or two of the minerals and afterwards our sectors... the stronger you are, the less you are bullied in your yard.”

While this make sense and is courageous, our farmers and other miners, along with their shareholders, could pay the price if China’s reprisals end up being a big hit to the prices and bottom lines of these interested parties.