A quiet truce between Washington and Beijing has lifted the threat of tariff storms from the front pages, yet beneath the calm two great economies are rewiring the arteries that feed them. Each now seeks less to build weapons than to fortify its own supply lines while learning how to starve the other's, a contest that traces back through the pandemic and the early years of Biden's Sullivan doctrine. The truce, extended until next January, has ended the tit-for-tat exchanges but left unanswered whether a shared sense of what counts as legitimate security can be found. It is a reminder that inte
The US-China Trade Truce Is Holding, But the Supply-Chain Arms Race Is Escalating Beneath the Surface
Interdependence has become a vulnerability.
Mark
The headline says the truce is holding. So why does the piece say the calm is misleading?
Mimi
Because the truce stopped the tariff escalation, but nothing in it limits what comes next. Neither side has built any mutual assurances, and both call this a national security priority.
Mark
And the fight has moved to supply chains?
Mimi
Yes. China throttled rare earth exports last year, and the US is funding mining and tightening chip and lithography controls. Each is trying to be able to squeeze the other.
Luke
Worth saying this is labeled opinion. The $1.5tn figure is an International Energy Agency estimate of a hypothetical blockage, not something that has happened.
Mark
What about the historical comparisons to Japan and the Axis powers?
Mimi
The author uses them as warnings. He says FDR's embargo probably contributed to Pearl Harbor.
Luke
Right, and "probably" is doing work there. These are analogies, not evidence that the same path is coming. Also, the piece doesn't say what the truce's terms are beyond the January extension.
Mark
Is there any way out?
Mimi
He suggests agreeing on what counts as a legitimate security risk, defining the yard, and China accepting that export growth without import growth is unsustainable.
Luke
That's a prescription, not a forecast. The piece itself says the odds of peace look slim.
El Pulso
- The truce has been extended to next January, but no mutual guarantees stop either side from launching fresh hostilities.
- China's rare earth export controls have shown how a single mineral lever can jolt Western industry and send tremors through defence supply chains.
- Washington is pouring hundreds of millions into critical mineral mining and tightening limits on advanced chips and chipmaking machinery.
- Beijing is answering with its own export restrictions on AI chips and solar technology, and threatening countries that try to loosen their dependence on Chinese minerals.
- Both capitals are digging in for a likely next round, with the January expiry looming as the next test of whether trade stays a bargaining table or becomes a battlefield.
A quiet truce between Washington and Beijing has lifted the threat of tariff storms from the front pages, yet beneath the calm two great economies are rewiring the arteries that feed them. Each now seeks less to build weapons than to fortify its own supply lines while learning how to starve the other's, a contest that traces back through the pandemic and the early years of Biden's Sullivan doctrine. The truce, extended until next January, has ended the tit-for-tat exchanges but left unanswered whether a shared sense of what counts as legitimate security can be found. It is a reminder that interdependence, once hailed as the guarantor of peace, can become the very ground on which conflict is fought.
The trade war between the United States and China has largely faded from the headlines, crowded out by worries about American democracy and artificial intelligence. Tariff alarms still flare now and then, as when Donald Trump threatened to cut off trade with deficit countries unless the Federal Reserve lowered rates. A Guardian analysis argues, however, that the calm is deceptive.
The truce reached last year has been extended until next January. It ended the cycle of tit-for-tat tariffs and left room for a future deal, yet no mutual assurances have been built to prevent fresh hostilities. Both governments describe the standoff as a core national security priority, and both appear to be preparing for another round.
This rivalry is unlike earlier arms races. Rather than building weapons, each side is making its own supply chains more resilient while learning to constrain, or throttle, the chains its rival depends on. The roots reach back to the pandemic, when Xi Jinping pushed to deepen other countries' dependence on China as a deterrent. Jake Sullivan's early Biden-era image of a 'small yard' of forbidden technology behind a 'high fence' has since outgrown its purpose, as export and investment curbs now slow China's broader progress.
China has answered by leaning on its dominance in critical minerals. Its rare earth export squeeze last year stunned Washington, and although some controls have been eased, many remain. The International Energy Agency has warned that a block on rare earth magnets could cost Western economies about $1.5tn a year. Washington, for its part, is funding mining and chip restrictions, while Beijing has announced its own curbs and threatened countries seeking to reduce their reliance on it.
A peaceful settlement would likely require agreeing on what counts as a legitimate security risk, a definition of the 'yard.' Ordinary commercial disputes, the author argues, should not be treated as wartime matters. He is not optimistic, recalling how raw material restrictions helped push the Axis powers toward aggression and how Roosevelt's embargo on Japan preceded Pearl Harbor. With rare earth magnets essential to American jets, submarines and missiles, trade has become a vulnerability and a potential theatre of war. All eyes now turn to January.
The trade war between the United States and China has mostly slipped off the front pages. Tariff fears still flare now and then, as when Donald Trump threatened to end American trade with countries running a deficit unless the Federal Reserve cut interest rates. But the prospect of an open economic conflagration between the world's two largest economies has been crowded out by other worries, among them the future of American democracy and the dangers of artificial intelligence. A Guardian analysis argues that the calm is misleading.
The truce that Washington and Beijing reached last year has been extended until next January. It ended the cycle of tit-for-tat tariffs and left a door open to some future trade deal, though that deal remains undefined. What the two governments have not done, the analysis says, is build any mutual assurances that would limit the outbreak of new hostilities. Both describe the standoff as a national security priority, essential to economic, technological and military supremacy, and both appear to be preparing for what looks like a next round.
This arms race differs from earlier ones. Instead of building weapons, each country is working to make the international supply chains it depends on more resilient, while learning how to constrain, and if necessary throttle, the supply chains its rival needs for economic and technological progress.
The logic goes back at least to the Covid pandemic, when Xi Jinping called on China to tighten other countries' production-chain dependence on China, creating a powerful countermeasure and deterrent against foreigners who might artificially cut off supply to it. Early in the Biden administration, national security adviser Jake Sullivan set out the American aim: limit China's access to a narrow set of advanced technologies with military uses, without upending the global economic order. His image was a "small yard" of forbidden technology behind a "high fence" of trade and investment controls.
The analysis says the conflict has outgrown that rationale. American restrictions on tech exports, investment and technology transfer have multiplied over the past half decade, and they now slow China's technological progress broadly, not just its military capability. Trump's frequent use of tariffs, the piece adds, does not help.
China has grown more assertive, leaning on its dominance of critical minerals used in civilian and military industry. Last year it stunned the Trump administration by throttling exports of rare earths and the magnets made from them, retaliating against US tariffs and against efforts to cut China off from high-end semiconductors and the lithography machines used to make them. Beijing has relaxed some of those controls but kept many others, and it has used them against other countries over policies it dislikes. The International Energy Agency has estimated that if China blocked US and European access to rare earth magnets, it could cost their economies about $1.5tn a year.
Both sides are now digging in. The Trump administration is putting hundreds of millions of dollars into mining and processing rare earths and other critical minerals, hoping to narrow China's lead, and it is intensifying efforts to limit China's access to frontier chips and the machinery to build them. China has announced export restrictions on a range of high-tech goods, including artificial intelligence chips and solar technology, and has threatened to punish countries that try to reduce their dependence on its minerals.
The author hopes for a peaceful settlement, which would probably need a shared understanding of what counts as a legitimate national security risk, in effect a definition of the "yard." Ordinary commercial frustrations, he argues, should not be handled on a wartime footing. China will likely dominate solar and perhaps electric vehicles, which may hurt in Brussels and Washington but is not worth a war, while Beijing must accept that pairing huge export growth with no import growth cannot be sustained.
He is not optimistic. He points to the Axis powers' territorial grabs as the League of Nations curtailed their raw materials, and to Franklin Roosevelt's block on American scrap steel and oil sales to Japan, which probably contributed to the decision to attack Pearl Harbor. American fighter jets, submarines and missiles all use rare earth magnets. Trade was once seen as a path to peace; in his telling, interdependence has become a vulnerability, and trade a theater of war. The next marker is the truce's expiry in January.
Citas Notables
Sullivan described a strategy of a 'small yard' of forbidden technology surrounded by a 'high fence' of trade and investment controls.— Jake Sullivan, former US national security adviser
Quieres la nota completa?
Lee el original en The Guardian ↗
Economy & Finance