The administration of US President Donald Trump is urging allied governments not to participate in next week’s United Nations conference, where a potential two-state solution between Israel and Palestine will be discussed.

A diplomatic cable sent on Tuesday, June 10, and reviewed by Reuters, states that countries engaging in “anti-Israel actions” following the conference will be considered to be acting against US foreign policy interests and could face diplomatic repercussions from Washington.

This previously unreported initiative contradicts the diplomatic efforts led by France and Saudi Arabia, two close allies hosting the upcoming meeting in New York. The conference aims to establish the parameters for a Palestinian state while ensuring Israel’s security.

The memo states, “We call on governments not to participate in this conference, which we find undermines the ongoing, life-saving efforts to end the war in Gaza and rescue the hostages.”

President Emmanuel Macron has hinted that France might recognize a Palestinian state in the Israeli-occupied territories during the conference. French officials have indicated they are working to avoid a conflict with the United States, Israel’s most steadfast ally.

If Macron proceeds with this step, France, home to Europe’s largest Jewish and Muslim communities, would become the first major Western power to recognize a Palestinian state. This could lend significant momentum to a movement that has, until now, been dominated by smaller nations generally more critical of Israel.

“The United States opposes any steps to unilaterally recognize a hypothetical Palestinian state,” the cable reads. “This would introduce significant legal and political obstacles to a final resolution of the conflict and would support Israel’s enemies by pressuring it during a time of war.”

For decades, the US has officially supported the two-state solution, which envisions the establishment of a Palestinian state in the West Bank and Gaza alongside Israel.

During his first term, Trump maintained a relatively moderate stance on the two-state solution, a long-standing pillar of US Middle East policy. The Republican president has offered few clues about his position on the matter for a potential second term.

However, on Tuesday, US Ambassador to Israel Mike Huckabee suggested that an independent Palestinian state is not among US foreign policy objectives.

The American memorandum argues that unilaterally recognizing a Palestinian state would “effectively make October 7th Palestine’s Independence Day.”

The US cable also notes that Washington is working “tirelessly” with Egypt and Qatar to secure a ceasefire in Gaza, release the hostages, and end the conflict.

“This conference undermines sensitive negotiations and emboldens Hamas at a time when the terrorist organization has rejected proposals from negotiators that Israel has accepted,” the US claims.

The cable adds, “The United States rejects the conference’s implications that it supports potential actions against Israel, including boycotts, sanctions, and other punitive measures.”

Israel has repeatedly criticized the conference, arguing that it “rewards Hamas for its attack on Israel,” and has pressured France not to recognize a Palestinian state.

“Nothing surprises me anymore, but I don’t know how many countries might be dissuaded from attending,” said a European diplomat who requested anonymity due to the sensitivity of the issue. “This is bullying, and it’s foolish bullying at that.”

US and Chinese officials have agreed on a framework to get their trade truce back on track and resolve China’s export restrictions on rare earth minerals and magnets. US Commerce Secretary Howard Lutnick announced this on Tuesday following two days of intensive negotiations in London.

Lutnick told reporters that the framework agreement adds “concrete substance” to the deal reached in Geneva last month, which aimed to ease retaliatory tariffs that were disrupted by China’s restrictions on critical mineral exports. The agreement will also lift some recently imposed US export restrictions.

“We have reached a framework to implement the Geneva consensus and the meeting between the two presidents,” Lutnick said. “The idea is to go back and talk to President Trump and make sure he approves. They will also go back and talk to President Xi and make sure he approves. If approved, we will implement the framework.”

Top economic officials from the US and China have been pushing for a deal to ease mutual export restrictions that threatened to derail the Geneva agreement, which had lowered tariffs that had reached triple-digit figures.

In a separate briefing, Chinese Vice Minister of Commerce Li Chenggang also confirmed that a trade framework had been agreed upon to be presented to the US and Chinese leaders.

“The two sides have, in principle, reached a framework for implementing the consensus reached by the two heads of state in their phone call on June 5 and the consensus reached at the Geneva meeting,” Li told reporters.

“We hope the progress made at the London meeting will contribute to strengthening trust between China and the US and to the healthy and stable development of economic and trade ties between the two countries,” he added.

While Li did not provide details on the progress made in the talks, the parties are expected to announce the content of the agreement after receiving approval from their respective national leaders.

Lutnick stated that China’s restrictions on the export of rare earth minerals and magnets to the US would be resolved as a “fundamental” part of the framework agreement.

“There were also a series of measures implemented by the United States when these rare earths were not forthcoming. You should expect those to be lifted in a balanced way, as President Trump has said,” Lutnick noted.

The new round of negotiations, initiated by the US and China to resolve trade tensions that had escalated with mutual tariff hikes, took place on June 9-10 at Lancaster House, a government mansion within walking distance of Buckingham Palace in London.

The historic venue, which also houses the British government’s 39,000-bottle wine cellar, was provided by the British government as a neutral ground for the talks between the two economic superpowers.

The US delegation was represented by Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer. The Chinese side was represented by Vice Premier He Lifeng, who is responsible for economic relations, Minister of Commerce Wang Wentao, and International Trade Representative Li Chenggang.

The London meeting was the first face-to-face encounter between He and Bessent since the signing of the 90-day truce agreement in Geneva.

The high-stakes negotiations were initiated to prevent two challenging issues—China’s rare earth exports to the US and US controls on technology exports to China—from derailing the broader talks.

Before the first round of talks in Geneva, Bessent had warned that the high tariffs imposed by both sides amounted to an embargo on bilateral trade. Highlighting the risks, China’s exports to the US in May saw their sharpest year-on-year decline since the 2020 pandemic.

The US accused China of failing to honor its commitment made in Geneva to ease restrictions on rare earth element exports, while Beijing increased pressure on Washington to lift its technology-related export controls. China also reacted strongly to the US announcing new restrictions after the Geneva meeting.

The US accused China of foot-dragging on approving shipments of rare earth elements, which are vital for the defense, automotive, and technology sectors. The slow pace of approvals has affected manufacturing supply chains in the US and Europe.

Beijing, in turn, accused Washington of “seriously violating” the Geneva agreement by issuing new warnings about the global use of Huawei chips, halting the sale of chip design software to Chinese companies, and canceling the visas of Chinese students.

On Monday, a senior White House official indicated that Trump might ease restrictions on chip sales to China if Beijing agreed to expedite the export of rare earth elements.

This would represent a significant policy shift from the Joe Biden administration’s “small yard, high fence” approach, which sought to limit China’s ability to acquire US technology.

Concerns are deepening over the potential damage from China’s restrictions on critical mineral exports, prompting some European automakers to consider measures against shortages of rare earth elements.

In April, China’s decision to suspend exports of a wide array of rare earth elements and associated magnets, reportedly in response to excessive tariffs imposed by US President Trump, disrupted supply chains crucial for automakers, aerospace manufacturers, semiconductor companies, and military contractors globally. This action underscores China’s dominance in the critical mineral industry, which is pivotal for the green energy transition, and is perceived as leverage in its trade dispute with the US. China accounts for approximately 90% of the global production of rare earth elements.

In May, US automaker Ford was compelled to halt production of its Explorer model at its Chicago plant for several days.

European Union Trade Commissioner Maros Sefcovic stated on Wednesday that he and his Chinese counterpart had agreed to clarify the issue of rare earth elements as soon as possible. EU Industry Strategy Commissioner Stephane Sejourne remarked, “We must reduce our dependence on all countries, especially certain nations like China, upon which we are more than 100% reliant.” After Brussels identified 13 new projects aimed at boosting metal and mineral supplies, Sejourne commented, “Export restrictions intensify our desire to diversify.”

Earlier on Wednesday, Mercedes-Benz production chief Joerg Burzer revealed that the automaker is in discussions with its largest suppliers about establishing “buffers,” such as rare earth stockpiles, to safeguard against potential supply threats. Currently, Mercedes is not affected by shortages. BMW reported that while a segment of its supplier network has been affected by shortages, its own manufacturing plants continue to operate normally.

The European automotive suppliers’ association, CLEPA, indicated that several production lines have been shut down due to depleted supplies and issued a warning about the escalating threat these controls pose to production. CLEPA further noted that only a quarter of the hundreds of export license applications submitted by automotive suppliers since early April have been approved, with some applications reportedly rejected by authorities due to “high procedural reasons.” CLEPA, without disclosing the names of the affected companies, warned that further disruptions are possible.

While China’s April announcement coincided with a broader retaliatory package against Washington’s tariffs, these measures are being enforced globally, generating concern among business executives across the world. Last week, German and US automakers voiced complaints, echoing similar concerns from an Indian electric vehicle manufacturer, that China’s imposed restrictions are threatening production. Many are urging their respective governments to find a swift solution and are actively seeking alternative supply sources.

Wolfgang Weber, CEO of Germany’s electrical and digital industry association ZVEI, stated via email that some companies possess supplies sufficient for only a few weeks or months. “Companies currently feel abandoned by policymakers and are, in part, seeking their own solutions to the challenging situation in China,” he remarked.

Swedish company Autoliv, the world’s largest manufacturer of airbags and seatbelts, announced that its operations remain unaffected. However, CEO Mikael Bratt mentioned that he has established a task force to manage the evolving situation.

Reports indicate that unconventional strategies are being explored in the US to secure urgently needed rare earth elements, or at least components derived from them. Consequently, automakers, in particular, are contemplating shifting the production of relevant components to China. Some are even considering sending nearly finished parts, such as electric motors, to China for the installation of indispensable rare earth magnets, with these components subsequently being shipped back to Western countries.

Dependence on China

Automakers such as General Motors and BMW, along with major suppliers like ZF and BorgWarner, are actively researching or developing motors with low or zero rare earth content to lessen their dependence on China. However, few have successfully scaled production to achieve cost reductions. BMW has begun incorporating magnet-free electric motors into its latest generation of electric vehicles. Nevertheless, the company still requires rare earths for smaller motors that power components such as windshield wipers and window regulators. German automaker Volkswagen has stated that it currently perceives no shortages.

China’s tightening of critical mineral export controls, following the initiation of a trade dispute by the US, has become a central theme in Trump’s criticisms of Beijing. Trump has sought to redefine trade relations with the US’s largest economic competitor by imposing substantial tariffs on billions of dollars worth of imported goods, aiming to reduce the trade deficit and recover lost manufacturing jobs. Trump imposed tariffs of up to 145% on Chinese goods, but subsequently retracted them following a significant sell-off in stock, bond, and currency markets, which was attributed to the broad scope of these tariffs. China retaliated with its own tariffs and is leveraging its dominance in crucial supply chains to pressure Trump into retreating.

The US President asserts that China violated a ceasefire agreement, reached in Geneva last month, which stipulated the rollback of tariffs and trade restrictions. Beijing, in turn, accuses Washington of breaching the agreement. The Trump administration further escalated the conflict with actions that Beijing described as “excessive pressure measures.” These included threatening to cancel visas for Chinese students in the US and halting the sale to China of certain key technologies related to jet engine semiconductor design.

Trump and Chinese President Xi Jinping are anticipated to meet this week. It is expected that the two leaders will attempt to resolve their differences, with export restrictions anticipated to be a prominent item on the agenda. In a social media post on Wednesday, Trump underscored the fragility of any potential agreement, stating that Xi was “VERY TOUGH AND VERY HARD TO MAKE A DEAL WITH.”

Another option: Ending the economic war

Alternatively, ending the economic conflict with China could offer a resolution. If North American and European nations were to lift their export restrictions targeting China, they might anticipate an exemption from Chinese countermeasures, which were implemented in response to the West’s economic pressure. However, such a move is not anticipated under current circumstances.

Industry representatives suggest that the EU could also act independently, without consulting the US. For instance, it could lift the ban on the export to China of cutting-edge machinery used in semiconductor production, manufactured by the Dutch company ASML. Such an action would alleviate tensions in the ongoing economic conflict. Nevertheless, there are currently no indications that such a step will be taken within the EU.