The recent talks between the US and China in London have left much to speculation, as both sides have been tight-lipped about the details. This silence contrasts sharply with the first round of talks in Geneva, where significant progress was announced, including temporary tariff reductions. The current talks have only resulted in vague statements about implementing previous agreements.
The high stakes involved in the trade war have escalated, with the conflict now extending to a supply chain war. China appears to have the upper hand, especially in rare earth minerals, essential for various industries. While the US has tried to block China’s access to high-tech chips, China’s control over rare earth minerals has caused disruptions in US production lines.
Despite the challenges, Chinese businesses remain confident in their ability to overcome obstacles. The country has made significant strides in technology and quality, reducing its reliance on foreign imports. In contrast, the US faces the dilemma of depending on China for rare earths, a resource that would be costly and time-consuming to develop domestically.
Given the current atmosphere of distrust and reluctance to concede, reaching a sustainable agreement in the ongoing trade war will be challenging. China’s position of strength in key industries will likely make negotiations difficult for both parties.
