Skipping the catfights: a temporary trace between China and the US
U.S.-China Trade Conflict: A Temporary Stalemate in Escalating Trade Disputes
In the heat of the moment, China and the US decided to take a step back and call a truce in their trade war. Both sides had been pushing each other towards the edge of a full-blown trade war, but self-preservation finally won out. Nationalists on both sides might be shouting about who blinked first, but the truth is, both sides managed to dodge a lose-lose situation. This temporary ceasefire lasts for three months, and there's no guarantee that an agreement will be reached by the end of it.
Beijing took a page from America's playbook by weaponizing a crucial industrial sector - rare earth supplies - in its back-and-forth with Washington.
Rare earths, that everyone has become quite familiar with by now, are far from rare. What makes China stand out is its dominance of the market, with around 90% of the extraction, processing, and supply chains in its control.
In April, China pulled the trigger. In addition to canceling orders for aircraft from Boeing, Beijing imposed extreme export restrictions on rare earth metals and magnets critical for modern electronics, such as cars, planes, computer chips, and smartphones. Industry experts in the US warned they were only weeks away from running out of supplies, and production could come to a halt, even resulting in layoffs.
Now, China has temporarily loosened its grip on these exports, giving the US "breathing room" in trade negotiations. This move shows China's aim to cool tensions while keeping a tight rein on these critical metals essential for high-tech and aerospace applications. Even though the export restrictions have been suspended for now, the volatility in global supply chains highlights China's significant influence in the market.
Overall, China's strategy with rare earth exports reflects a tactical approach to managing trade disputes while preserving its control over strategic resources, which could tip the scales in future geopolitical negotiations, particularly with the US.
In this temporary trade ceasefire, both China and the US are expected to address policy-and-legislation issues surrounding their ongoing trade rivalry, including the controversial policy of China's rare earth supply dominance, a crucial industry tactically used in the politics of trade negotiations.
Should an agreement not be reached within the three-month truce, the geopolitical news of the standoff between the two nations, particularly focusing on the continuing issue of rare earth exports, is likely to remain a topic of general-news discussions.
