1/
It looks like China just won this round of the trade war.
They withheld rare earth exports, and now they’re getting NVIDIA chips again.
In return, the U.S. is easing tech export restrictions.
Let’s dive into the backchannel deals making this swap possible.
It looks like China just won this round of the trade war.
They withheld rare earth exports, and now they’re getting NVIDIA chips again.
In return, the U.S. is easing tech export restrictions.
Let’s dive into the backchannel deals making this swap possible.
2/
📍 Geneva, May 2025: A symbolic tariff truce.
The U.S. agreed to pause new tariffs and lower existing levies.
China committed to resuming rare earth export licenses.
But implementation stalled as China slow-walked paperwork and the U.S. tightened chip controls.
📍 Geneva, May 2025: A symbolic tariff truce.
The U.S. agreed to pause new tariffs and lower existing levies.
China committed to resuming rare earth export licenses.
But implementation stalled as China slow-walked paperwork and the U.S. tightened chip controls.
3/
June 5: Trump and Xi spoke directly.
The White House called it “productive.”
Rare earths and tech export controls were central to the conversation.
June 5: Trump and Xi spoke directly.
The White House called it “productive.”
Rare earths and tech export controls were central to the conversation.
4/
📍 London (Lancaster House), June 9–11: The two sides held formal trade consultations.
The U.S. delegation included Bessent, Lutnick, and USTR officials.
China was led by VP He Lifeng. This is where the real trade took shape.
📍 London (Lancaster House), June 9–11: The two sides held formal trade consultations.
The U.S. delegation included Bessent, Lutnick, and USTR officials.
China was led by VP He Lifeng. This is where the real trade took shape.
5/
The quid pro quo:
• China fast-tracked rare earth export licenses
• The U.S. selectively eased controls on AI semiconductors and EDA software
Neither side admitted it publicly, but both knew what was happening
The quid pro quo:
• China fast-tracked rare earth export licenses
• The U.S. selectively eased controls on AI semiconductors and EDA software
Neither side admitted it publicly, but both knew what was happening
6/
Reuters noted that military-grade materials remain restricted.
But civilian-use elements like dysprosium and terbium are back in play.
China’s magnet exports have resumed under a six-month “green channel” window.
Reuters noted that military-grade materials remain restricted.
But civilian-use elements like dysprosium and terbium are back in play.
China’s magnet exports have resumed under a six-month “green channel” window.
7/
Bloomberg reported that Nvidia and AMD secured licenses in July to resume exports of watered-down AI chips to China.
In parallel, Chinese firms began receiving rare earth permits again.
Bloomberg reported that Nvidia and AMD secured licenses in July to resume exports of watered-down AI chips to China.
In parallel, Chinese firms began receiving rare earth permits again.
8/
This is classic realpolitik.
China used its mineral dominance to unlock access to compute.
The U.S. gave up leverage for short-term supply stability.
No structural reforms, no IP protections. Just materials for chips.
This is classic realpolitik.
China used its mineral dominance to unlock access to compute.
The U.S. gave up leverage for short-term supply stability.
No structural reforms, no IP protections. Just materials for chips.
9/
The message is clear.
Strategic interdependence still rules.
The world is not decoupling. It's just bartering.
China acts like a central banker for the physical world.
Not through money, but through minerals.
The message is clear.
Strategic interdependence still rules.
The world is not decoupling. It's just bartering.
China acts like a central banker for the physical world.
Not through money, but through minerals.
10/
Investors take note:
• Rare earth exposure remains a core geopolitical hedge
• Nvidia’s China revenue is far from gone
• Export controls will become more transactional
Keep an eye on who controls the bottlenecks, not just the tech stacks.
Investors take note:
• Rare earth exposure remains a core geopolitical hedge
• Nvidia’s China revenue is far from gone
• Export controls will become more transactional
Keep an eye on who controls the bottlenecks, not just the tech stacks.
11/
This wasn’t a win for diplomacy.
It was a cold, calculated trade:
Rare earths for AI chips.
Matter for compute.
China blinked less.
This wasn’t a win for diplomacy.
It was a cold, calculated trade:
Rare earths for AI chips.
Matter for compute.
China blinked less.
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