02-06-2025

Trade Truce Teeters Amid Tech And Minerals Clash

Date: 02-06-2025
Sources: cnbc.com: 3 | edition.cnn.com: 1 | nytimes.com: 1 | scmp.com: 1 | theguardian.com: 1 | washingtonpost.com: 1
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Source: scmp.com

Image content: The illustration shows a student standing on a campus under a large magnifying glass, with an American flag on the building behind. The magnified view reveals the student’s shadow forming the shape of China with its flag, suggesting scrutiny or suspicion related to Chinese influence or identity.

Summary

A fragile U.S.-China trade pause is unraveling as both sides trade accusations of violating a 90-day Geneva understanding, with Washington alleging Beijing is slow-walking rare earth and magnet exports while China condemns new U.S. tech controls and student visa revocations as discriminatory. The standoff is squeezing supply chains—especially rare earth magnets crucial to automakers and robotics—prompting price spikes and substitution in China’s food sector as tariffs and uncertainty push restaurants away from U.S. beef and chicken feet. Efforts to rebuild non-Chinese rare earth capacity in the U.S. and Europe remain nascent, amplifying near-term shortages. With talks stalled and rhetoric hardening, officials hint that a Trump–Xi call is needed to break the impasse amid rising geopolitical and security tensions.

Key Points

  • Both countries accuse each other of breaching a 90-day trade truce, stalling negotiations.
  • U.S. says China is delaying rare earth and magnet exports; China decries U.S. tech controls and visa revocations.
  • Rare earth magnet shortages threaten U.S. and European manufacturing, especially autos and robotics.
  • Tariff uncertainty drives Chinese restaurants to drop U.S. beef and chicken feet in favor of alternatives.
  • Leader-level intervention via a potential Trump–Xi call is viewed as necessary to revive progress.

Articles in this Cluster

China says U.S. undermined Geneva trade deal after Trump accusations

China rejected U.S. claims it violated a recent Geneva trade understanding, accusing Washington of breaching the deal by tightening tech export controls and revoking Chinese student visas. Beijing said these moves undermine the 90-day tariff suspension reached after talks between U.S. Treasury Secretary Scott Bessent and Vice Premier He Lifeng, and vowed countermeasures. The U.S. actions come amid frustration over China’s tight control of rare earths exports. Analysts note Beijing’s hard line and U.S. inter-agency discord have stalled progress, with hopes for a Trump–Xi call uncertain. Broader tensions are escalating, as Pentagon chief Pete Hegseth warned of an “imminent” China threat in the Indo-Pacific, drawing sharp Chinese rebuttals.
Entities: China, United States, Geneva trade understanding, Scott Bessent, He LifengTone: analyticalSentiment: negativeIntent: inform

Tariffs in China: Restaurants dropping U.S. beef and chicken feet

Chinese restaurants and suppliers are dropping U.S. beef and chicken feet as tariff uncertainty drives prices sharply higher. A 90-day tariff pause agreed in Geneva is in jeopardy amid mutual accusations of violations, including U.S. AI chip controls. Beijing eateries report replacing U.S. beef with Australian (which faces zero duty) and sourcing chicken feet from Brazil or Russia, though they say quality is inferior. Prices for U.S. beef are up about 50% and American chicken feet about 30% since March, pushing venues like Home Plate and Kunyuan in Beijing to remove them from menus. Businesses hope prices stabilize if political tensions ease.
Entities: China, U.S. beef, chicken feet, tariffs, Geneva 90-day tariff pauseTone: analyticalSentiment: negativeIntent: inform

Trump and China's Xi will likely talk very soon: White House

A senior White House official says President Trump and China’s President Xi are likely to speak “very soon,” amid rising tensions that threaten a tentative trade deal reached in mid-May. Markets fell as both sides traded accusations: the U.S. says China is slow-walking critical mineral exports, while Beijing accuses Washington of provoking new frictions, including warnings about Chinese chips. After April’s sweeping U.S. tariffs of up to 145% and China’s retaliation, both countries agreed to a 90-day tariff scale-back, but progress has since stalled. Treasury Secretary Scott Bessent says leader-level engagement is needed, while Trump accused China of violating the agreement.
Entities: Donald Trump, Xi Jinping, White House, United States, ChinaTone: analyticalSentiment: negativeIntent: inform

China says US is ‘provoking frictions’ as it responded to Trump’s claims of trade truce violation | CNN BusinessClose icon

China accused the U.S. of provoking new trade frictions and undermining their recent Geneva truce, rejecting President Trump’s claim that Beijing violated the agreement. The U.S. expected China to ease export controls on rare earth minerals during the 90-day window, but Beijing has not lifted them, prompting new U.S. measures limiting tech sales and Chinese student visas. China’s Commerce Ministry criticized these steps as discriminatory and said it would take resolute action to protect its interests. Talks are described as stalled, with both sides signaling leader-level intervention may be needed, while economic pressures mount and tariffs remain high.
Entities: China, United States, Donald Trump, Commerce Ministry of China, rare earth mineralsTone: analyticalSentiment: negativeIntent: inform

U.S. Dependence on China for Rare Earth Magnets Is Causing Shortages - The New York Times

China’s abrupt halt of rare earth magnet exports amid a trade war has created acute shortages for U.S. and European manufacturers, especially automakers, risking imminent production cuts. The U.S., which offshored magnet production to China decades ago, now relies on China for 90% of high-performance magnets and nearly all refining of crucial heavy rare earths. Efforts to rebuild the supply chain—such as MP Materials’ Texas magnet plant and start-ups like Phoenix Tailings producing rare earth metal ingots—remain small and costly compared with China’s state-backed, environmentally lax, and technologically advanced industry. Licensing delays in China, temporary shutdowns at Chinese magnet makers, and limited alternative capacity underscore a critical vulnerability that could stall U.S. automotive and robotics production in the coming weeks.
Entities: China, United States, rare earth magnets, MP Materials, Phoenix TailingsTone: analyticalSentiment: negativeIntent: warn

Students as spies? US-China educational ties strained by rising claims of espionage | South China Morning Post

US-China educational ties are under strain amid rising, often unverified allegations of Chinese student espionage in the US. Recent claims—ranging from supposed spy activity at Stanford to propaganda concerns at Duke Kunshan and scouting near a Michigan military site—have fueled political pressure to curb academic exchanges. In response, the US State Department announced it will more aggressively revoke visas for Chinese students, especially those linked to the Chinese Communist Party or studying “critical fields,” citing intelligence and research-theft risks. Analysts say the espionage threat is overstated and lacks substantiation, warning that broad restrictions could damage academic collaboration and innovation without clear security gains.
Entities: US State Department, Chinese students, Chinese Communist Party, Stanford University, Duke Kunshan UniversityTone: analyticalSentiment: negativeIntent: inform

China accuses US of ‘seriously violating’ trade truce | China | The Guardian

China accused the US of seriously violating a 90-day trade truce agreed on 12 May, after President Trump said China had “totally violated” the deal by not easing restrictions on critical minerals and magnets. The US claims China’s export curbs are disrupting global supply chains; China denies breaching the agreement and instead blames Washington for discriminatory measures, including AI chip export controls, restrictions on chip design software, and revoking Chinese student visas. Tensions have also risen over US statements labeling China an imminent threat. Another Xi-Trump call is expected as talks falter and US companies report shortages of key components.
Entities: China, United States, Donald Trump, Xi Jinping, trade truceTone: analyticalSentiment: negativeIntent: inform

China calls Trump’s trade deal accusations ‘groundless’ - The Washington Post

China rejected President Trump’s claims that it violated a recent trade truce by delaying rare earth export licenses, calling the accusations groundless. Beijing argued the United States undermined the agreement by imposing new restrictions on Chinese microchips and students. U.S. officials said China was slow-walking approvals for rare earths vital to electronics and jet engines, while the dispute highlights ongoing tensions despite a tentative deal.
Entities: China, Donald Trump, United States, rare earths, microchipsTone: analyticalSentiment: neutralIntent: inform