Introduction to the US-China Trade War
The world breathed out when the United States and China unveiled a 90-day tariff armory last month and held the escalating trade war between the largest and second largest economies in the world that had moved folded companies and investors. After tense negotiations in Geneva, the US tariffs used 145% to 30% and China’s retaliation for US goods from 125% to 10%.
Rising Tensions
Just three weeks later, US President Donald Trump raised the tensions again and said China "completely injured" the ceasefire without providing further details. Trump later said that his Chinese counterpart, XI Jinping, was "extremely difficult to make a deal". China countered quickly and claimed that Washington had imposed "discriminatory and restrictive measures" since the Geneva talks and pointed out to US -Bordstones on Chip design software and warnings of artificial intelligence (AI) pips (AI) pips produced by the Chinese Tech -Riesen Huawei.
Deal Above US Access to Rare Earth
US political decision-makers have expressed frustration that China’s export license permits for rare earths and other elements that are needed in the sectors high-tech, defense and clean energy have been brought to a standstill. China, which dominates the global production of rare earth with over two thirds of the offer and 90% of the processing capacity, has imposed several important minerals export restrictions. In the United States, which are delighted by rare in the domestic processing capacity, Beijing’s restrictions are still very susceptible.
Confusion Over Rare Earths
The confusion remains above what was agreed on rare earths in Geneva. In an interview with the Bloomberg news agency on Wednesday, Cory Combs, head of critical-mineral supply chain research at Trivium China, said Washington said that Beijing would "completely eliminate the requirements of admission [for export licenses]"What Beijing said it was not true. Michael Hart, President of Amcham China, told the Finance times On Monday, China now increased the permits for the shipping of rare earths to several US automobile manufacturers and determined how "only a handful of" civil servants process thousands of applications.
Trump’s Economic Philosophy
Trump’s business philosophy has been to use tariffs for maximum leverage. The United States has not only granted access to China’s rare minerals, but tried to reduce its trade deficit with China, which was 295 billion US dollars (259 billion euros) in 2024 – by almost 6%compared to the previous year. The Trump administration has asked Beijing to increase the purchases of American goods and to remove non-tariff obstacles such as anti-monopoly probes on US companies and the designation of certain American companies as "unreliable companies".
Will Trump-Xi Break the Deadlock?
With the US Finance Minister Scott Bessent, the negotiations recognized in the past week that the negotiations have "stalled", all eyes on whether a call between Trump and XI will break the tariff image. The US President has been saying for months that the two leaders should speak and even spoke from traveling to China for talks without reacting from Beijing. The White House said on Monday that a Trump Xi call "would probably" take place this week, a development that Antonio Fatas, an economic professor at InSead Business School, said that the US President would see as "his victory".
Tariff Court Battle Plays in China’s Hands
Another blessing to China could be the lack of clarity about Trump’s unprecedented tariffs after a US trade court decided last week that they were illegal. Although a higher court temporarily restored the taxes, the White House has threatened to go to the Supreme Court of Court for the final decision. "There may be hesitation to make an offer at this moment in which the US position in the USA lacks great clarity," the Naas of the German Marshall Fund told DW.
Customs Duties from the US-China Tech Fight
Both the Trump and Biden management have prioritized the maintenance of the technological advantage of the United States to China. However, there are increasingly concerns that tariff policy distracts the resources and concentrate from the ability of the US company to achieve this goal. Investor nervosity that could cause tariffs have intensified a US recession. The tariffs have already increased the costs and stressed budgets for American technology companies and have limited their capacity for investing in research and development (F&E) at a critical time.
Conclusion
Beijing has now doubled to reduce its dependence on the US technology. Through essential state subsidies, China has pushed its skills in AI, Quantum Computing, advanced chip production and 6G telecommunications and narrowed the technological gap in the United States. Naas believes that China now "made most of the technological advantage that the United States has thought" "and that US companies say that they" fall back as they spend their entire time to reorient their supply chains ". "Is that the best use of your time when we are in the future of technology?" she asked.
