Today, China is attempting to strangle certain sectors of the economy of the United States and the economies of the free world. China has imposed expansive restrictions on rare earth exports. Even goods that contain trace amounts of rare earths are subject to China’s export restrictions. U.S. Treasury Secretary Scott Bessent claims China has “pointed a bazooka at the supply chains and the industrial base of the free world.”
For now, China thinks it has the upper hand in the trade negotiations with the U.S. But President Donald Trump and his senior advisers have negotiating cards to play as well. For example, China is probably more than five years behind the free world in semiconductor fabrication technology. Semiconductors are the oil of this century. The U.S. can deny China access to critical inputs into the semiconductor manufacturing process. Without these inputs, China cannot make headway in catching up in the semiconductor industry.
