This piece originally appeared in The Diplomat.
Imagine the China-U.S. trade war as two opposing armies exchanging bursts of gunfire, one volley after another. Responding to China’s unfair trade practices, the United States imposed tariffs on a broad range of Chinese exports. In turn, China restricted rare earth exports necessary for American automotive and defense manufacturing. The U.S. retaliated by freezing jet engine sales, technology that China can’t find anywhere else.
Then came a lull. In June, President Donald Trump announced that China would resume exports of rare earths, in return for the U.S. providing China with the student visas it wanted. Subsequently, the U.S. and China announced a formalized agreement to resume Chinese heavy rare earth exports, while the United States will resume jet engine, software, and ethanol exports.
But this isn’t a truce. It’s only a ceasefire in a trade war that is likely to erupt again and again in the coming years. China left its growing infrastructure for export controls in place: rare earth export licenses require sensitive information disclosures and only last for six months. And once the trade war breaks out again, the United States may find that China has more ammunition than it does.
