There is no precedent for negotiation over security-imposed export controls.
The Accidental Strategy
The Wall Wall Street Journal reports Trump Gives U.S. Negotiators Room to Lift Export Controls on China
Ahead of U.S.-China talks in London, President Trump authorized Treasury Secretary Scott Bessent’s team to negotiate away recent restrictions on the sale of a wide variety of technology and other products to China, according to people familiar with the matter.
It’s a novel strategy, underscoring the impact of China’s rare-earth controls on U.S. industries.
“Historically, export controls have never been used as leverage for trade negotiations,” said Kevin Wolf, a partner at Akin Gump Strauss Hauer & Feld who specializes in international trade. “There is no precedent for this.”
The products covered by recent U.S. restrictions—never publicly announced by the administration—include jet engines and related parts, which China needs to make its own commercial aircraft; software required by Chinese companies to produce chips; and ethane, a component of natural gas important in manufacturing plastics, according to the people.
Export Controls Escalated by Biden
The 5D advocates will be crowing over this, but reality is the Trump administration was forced into this position by China’s rare earth response.
To understand Biden’s role, please see Biden Administration’s Updated Export Controls
On December 2, 2024, the Biden administration published two new (with more evidently still to come) updates to the China AI and semiconductor export controls that it released in October 2022. As with the first Trump administration—which made major changes to semiconductor export control policy during its final months in office—these late-term Biden export controls are a bombshell. At a high level, the new controls take eight major actions.
… Each of these moves are broadly consistent with the three critical strategic rationales behind the October 2022 controls and their October 2023 update, which aim to: (1) choke off China’s access to the future of AI and high performance computing (HPC) by restricting China’s access to advanced AI chips; (2) prevent China from obtaining or domestically producing alternatives; and (3) mitigate the revenue and profitability impacts on U.S. industry by continuing to allow Chinese sales for less advanced (and therefore presumably less threatening) technologies.
The above report is very detailed on what Biden did. So, if you want to credit 5D thinking, credit Biden.
Quick Resolution?
The talks are likely to result in Beijing quickly releasing rare earths for export, and Washington easing China’s access to semiconductors, said Kevin Hassett, director of the National Economic Council. “I expect this to be a short meeting with a big strong handshake,” he told CNBC on Monday, as noted by the WSJ.
Color me skeptical on that, and only if China get’s a big TACO from Trump on relaxing Biden’s export controls.
But it’s possible.
Two-TACO Trump Day on His Call to Xi Over Rare Earth Elements
On June 5, I commented Two-TACO Trump Day on His Call to Xi Over Rare Earth Elements
Trump is hyping up his call with China’s Xi. But chalk up 2 more TACOs.
The first TACO was Trump called Xi after he insisted Xi call him. The second was total capitulation on student visas.
On May 28, Secretary of State Marco Rubio, posted this bold announcement: New Visa Policies Put America First, Not China
Under President Trump’s leadership, the U.S. State Department will work with the Department of Homeland Security to aggressively revoke visas for Chinese students, including those with connections to the Chinese Communist Party or studying in critical fields. We will also revise visa criteria to enhance scrutiny of all future visa applications from the People’s Republic of China and Hong Kong.
On June 5 Trump said “It’s our honor to have them, frankly.”
Irony of the Year: Automakers Consider Moving Some Parts Production to China
On June 4, I discussed the Irony of the Year: Automakers Consider Moving Some Parts Production to China
China has a magnet stranglehold that causing some seemingly strange discussions.
Understanding Rare Earths
China produces 60 percent of the world’s rare earths but processes nearly 90 percent, which means that it is importing rare earths from other countries and processing them. This has given China a near monopoly.
Trade Wars are Good and Easy to Win
March 2, 2018: Trump Tweets “Trade Wars are Good and Easy to Win”
Seven years later ….
June 4, 2025 Trump: I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!
What a hoot.
The key question is soft-shell or hard.
The faster the agreement, the more soft-shell TACOs Trump will be serving.
TIBS: Trump is bullshitting Syndrome.
Come on, give him a break: he is OLD.
He is older than my Father-in-Law, who can barely manage a household and bills. He is so dim that I gotta walk him through shit and then he screams at me out of being embarrassed for asking or some such Psycho reason. I can barely stand to look at him and I placate my Wife to keep her from being on my case as well.
So, knowing an 85 year old prick here down on earth, I cannot imagine how frustrating Trump’s handlers are with him, similar to Biden with a sense of humor.
These men are too old. They need to go away and let in some young blood.
T A C O
Why would China export REE to the US for use in electronics weapons and F35s when the US won’t send chips to China.
Do we even have a Dept. of Energy now?
I recall how, under Biden, that Dept. was working on securing supply chains for critical elements.
https://www.zerohedge.com/markets/chinas-need-us-chemicals-greater-us-need-rare-earths
That is absurd.
Very pleased to hear releasing each other’s stranglehold which is recipe for world peace.
TACO Tuesday coming right up.
Oh, CLEVER, MPO!
STOP! I cannot handle all this winning!! lmao
The taco metaphor just keeps getting funnier!
Taco – Puttin’ On The Ritz (Official Video)
As with any written opinion piece, it all comes down to how it’s FRAMED. Sure it can be said that Trump is “chickening out again” but let’s take a more rational look at the facts.
The export controls that the Biden administration imposed are realistically unenforceable, they include terms like;
“which aim to: (1) choke off China’s access to the future of AI and high performance computing (HPC) by restricting China’s access to advanced AI chips; (2) prevent China from obtaining or domestically producing alternatives; ”
That’s as ludicrous as Xi stating the US cannot domestically refine rare earth elements, and they will restrict the US from sourcing rare earth magnets from anywhere in the world.
Why not use them in negotiations?
You are confusing goals (definitely have not worked) with the export controls.
And it was China’s export controls that got Trump to call Xi
A cartoonist could have a field day with Trump’s taco stand with a menu offering AI chips and other semi conductors, jet engine parts and ethene with a sign we accept rare earths and magnets. This whole episode underlines the advantage that dictator for life countries have over democracies that policies can do a 180° every 4 or 8 years. China/Xi are fixed on the horizon not the next election and their monopolies over several key minerals, metals etc.is a long-term project. Worse for the democracies is when you have a POTUS or PM who is as mercurial as Trump.
Let’s look at all of this through the lens of someone who has spent most of his professional career in the industrial/commercial real estate world. Lot’s of bluster and bravado: check; Very much influenced and motivated by good looking people (both men and women, but especially men): Check (the front facing folks in the commercial real estate world are impossibly attractive); Overconfident in thinking he always hold the cards: check; Impulse vs. doing the hard work of research and being prepared: check; the metric for success is getting a deal done and not necessarily a good deal: check; concession strategy for someone pre-occupied with getting any deal is too frequent and too predictable: check.
Oddly enough, there is one realm where Trump’s commercial real estate background and related predilections may prove to be a winner: The Middle East.
Beyond this, except a whole lot more concessions from Trump because when it comes to trade, he just hasn’t done his homework. There was actually a pathway available to achieve many of his policy goals, primarily incremental revenue generation for the Treasury and some re-shoring. But he hasn’t done his homework and policy execution is erratic. It’s also true that his propensity to offer concessions early and often weakens the Administration’s hand. The folks on the other side of the table will have an easy go of it.
For me, it’s not about “homework” … it’s worse, it’s about basic intelligence (or the complete lack thereof).
Do not under-estimate the amazing laziness of people, even our so-called members of our Leadership. I hired over 250 people as a Business owner, and 75% of them were Execs reporting to me. I was amazed at how little “hustle” there was in people. Sure, they were bright, but if you cannot work AT IT, you cannot DO IT well. It takes time, patience, the ability to read people well, and negotiating skills requires NEVER REVEALING your BOTTOM LINES….until cornered.
The Middle East countries Trump visited a week or so back just began the process of tying themselves to China and ASEAN countries to form a trading bloc of 2Bil people
So, it turns out the ME aren’t into Donold that much, either. He is, to them, an easily manipulated buffoon…begging for palaceplanes
Don’t look now, but is someone anticipating ICE catalytic convertors making a comeback?
Pt
Trump “likes President 11, always have and always will.” What utter bullshit. Trump may like him, but 11 is going to be out on his ass in a few months. New regime coming in, so might as well wait to see who is really in charge.
It is a given that TACO will cave in once again and China will likely be the winner.
Here is is “pre-caving in”
If I were China I would let him hang himself out to dry and do nothing to reverse the REE controls already in place. MAXP PAIN
And the sooner Walmart, Target and Home Depot are out of business, the better.
they gutted main streets by buying off politicians. that’s as amerikan as apple pie. we ain’t an empire of heart. we’re just nihilists. bottom to top. screw the old hardware stores and such. those old local owned businesses. fuck them. to buy a few more nails. or tshirts or junk
Gonna shop where?