Tech Tug-of-War: US-China Rare Earth Truce, but Chip Choke Holds Remain cover art

Tech Tug-of-War: US-China Rare Earth Truce, but Chip Choke Holds Remain

Tech Tug-of-War: US-China Rare Earth Truce, but Chip Choke Holds Remain

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 This is your Beijing Bytes: US-China Tech War Updates podcast.

Welcome back, tech sleuths—Ting here, delivering your biweekly scoop on the digital chess match that is the US-China tech war. This is Beijing Bytes, and I’ll cut to the silicon chase: the rivalry isn’t cooling off, it’s just gotten a firmware update.

Picture it: two weeks ago, just as you were finishing your coffee, Beijing and Washington were locked in yet another round of marathon trade negotiations in, of all places, rainy London. On June 5th, Xi Jinping and Donald Trump (yes, he’s back in the White House) had their infamous phone call, breaking some ice and setting the stage. Fast forward to June 11th—President Trump posts (not tweets, but Truth Socials) that the US and China reached a tentative trade deal. The headline? Reciprocal tariffs slashed to 10%. That’s right, a partial truce, at least on paper.

But here’s the twist: tech wasn’t left out in the drizzle. China agreed to temporarily ease its stranglehold on rare-earth exports for six months. Why does this matter? Because rare earths are the secret sauce in everything from fighter jets to your phone’s vibration motor, and China controls 85% of the global supply chain. Within hours, a major magnet maker in China announced it had snagged an export license. This is huge for US manufacturers, who’ve been sweating bullets over rare earth shortages. But don’t get too cozy—this is a six-month Band-Aid, not a cure.

Meanwhile, the US didn’t budge much on advanced tech export controls. Treasury bigwig Scott Bessent and Commerce Secretary Howard Lutnick held the line: no loosening on cutting-edge chip or AI-related tech for now. Beijing pushed hard, but Washington knows that semiconductors are today’s nuclear codes—the lines must be drawn with a soldering iron.

If you’re in the business world, you felt the aftershocks. Smartphone exports from China crashed a jaw-dropping 72% year-on-year—the steepest drop since records began in 2011. Companies like Huawei and SMIC, already bruised by entity list restrictions, are now racing to retool with homegrown tech while facing mounting global skepticism.

What’s the strategic playbook here? The US is laser-focused on maintaining the choke points: advanced chip tech, semiconductor manufacturing equipment, and software exports. China, for its part, doubles down on self-sufficiency, rolling out another $143 billion for homegrown semiconductor innovation. It’s a tug-of-war between American ingenuity and Chinese scale—each side determined to avoid dependence and claim the digital throne.

Expert consensus says we’re not in a tariff war anymore. The new battlefield is technological sovereignty. Both nations are playing a long game, betting that future economic power and military strength hinge on who writes the code and builds the chips.

Forecast? Expect more tactical truces like the rare-earth reprieve, but don’t hold your breath for a handshake moment. With mutual distrust—and a few cyber incidents I can’t even talk about yet—both sides are arming for a drawn-out, high-stakes match.

Stay plugged in. Until next time, this is Ting, bringing you the bytes behind the Beijing bravado.

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