Top U.S. and Chinese officials met in Malaysia on Saturday to lay the groundwork for a summit between Donald Trump and Xi Jinping, with some on Wall Street saying Beijing overplayed its hand by imposing draconian restrictions on rare earth exports.

Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng held negotiations that the U.S. characterized as constructive. But sources told the Financial Times China was reluctant to ease the export controls.

If Beijing refuses to budge and talks between Trump and Xi on Thursday don’t result in a deal to roll back export controls, U.S. tariffs on China would soar to 157%. In addition, other countries may increasingly side with Washington, overcoming earlier backlash against the U.S. over Trump’s global tariffs.

“As China’s leader

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