Washington recently accused Beijing of not honouring its tariff commitments and delaying the easing of export restrictions on key minerals like rare earths. In response, Beijing criticised the U.S on June 2 for unilaterally escalating trade tension and vowed to take strong action to defend its rights. SMU Associate Professor of Finance Fu Fangjian noted that ahead of the second round of China-U.S. trade talks, the Trump administration is ramping up pressure while China remains firm on not making concessions. Given the deep mistrust and wide differences, the outcome is hard to predict. However, Assoc Prof Fu stressed that China holds significant leverage in the rare earth sector and is unlikely to ease export controls soon, viewing rare earths as a strategic bargaining chip in future high-tech negotiations.
