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NDTV
21-07-2025
- Business
- NDTV
6 Ways China Beat Trump At Trade Negotiations - And What India Can Learn
The June 2025 agreement between the US and China to ease export controls marked a significant turning point in their ongoing trade confrontation. Despite President Trump's bluster and maximalist rhetoric, the substance of the deal reveals a Chinese tactical victory. It was Beijing, not Washington, that dictated the pace, terms, and structure of the negotiation. China secured the removal of key US restrictions while offering limited, vague, and easily reversible concessions. There are six key factors that enabled China to extract concessions and stabilise the trade truce on its own terms. Rare Earth Edge First, the most potent lever was Beijing's precise restriction of rare earth exports, especially heavy rare earth elements such as dysprosium and samarium-materials indispensable to US defence systems, EV motors, and advanced electronics. Unlike the 2010s, China has since vertically integrated and state-centralised the entire rare earth supply chain, eliminating wildcat miners and enforcing stringent export licensing under "dual-use" military-industrial clauses. The result: a credible threat of supply chain paralysis for US defence and tech manufacturers. This forced Washington to prioritise the restoration of rare earth flows. Building Pressure Within US Second, China operationalised a suite of new legal instruments, including the Export Control Law and the Anti-Foreign Sanctions Law, to signal that Western companies could face legal jeopardy if they complied with US sanctions. This placed firms in a regulatory dilemma: violate US law or risk penalties in China. The ambiguity and scope of these laws added risk premiums to US restrictions and created stakeholder pressure within the US corporate sector to seek de-escalation. Structural Patience Third, Xi Jinping operates within a system of centralised authority, long-term policy continuity, and near-total control of the narrative. Trump, by contrast, thrives on spectacle, rapid cycles of escalation, and reactive policymaking. China framed the negotiations as a test of national sovereignty and "economic bullying", allowing it to rally domestic support and present any compromise as strategic resistance. The lack of political cost for slow-walking talks gave Beijing structural patience. Building Their Own The fourth lever was state-orchestrated industrial substitution and technological resilience. The Huawei case epitomises this lever. Despite US restrictions on chipmaking equipment and AI accelerators, Huawei launched a 5G smartphone in 2023 using domestically produced chips via chiplet "stacking". The perception that Chinese industry could bypass Western tech reinforced Beijing's credibility and deflated US assumptions about sustained technological chokeholds. This industrial resilience signalled to US negotiators that restrictions were increasingly ineffective and self-harming. Surgical Approach Fifth, China pursued calibrated trade retaliation and tactical concessions. Rather than blanket retaliation, China issued surgical trade restrictions targeting politically sensitive US exports (e.g. ethane) while selectively granting rare earth export licences to European firms (such as Volkswagen suppliers). This fragmented the Western alliance and demonstrated Beijing's capacity to divide pressure coalitions. In contrast, the US suffered from coalition fatigue and domestic backlash from industry groups over export controls. No Longer Dependent On Imports Finally, declining Chinese import demand - especially from the US - provided a kind of strategic insulation. Xi Jinping's shift towards economic self-reliance, emphasising industrial localisation, software substitution, and inward-focused stimulus, has structurally reduced China's import elasticity. China's imports have remained flat, while exports soared 33% since 2022. This makes tariff threats less effective because China no longer needs to import as much. As The Wall Street Journal noted, "China's vision of trade is exporting without importing." This reduces US leverage based on access to its own market. As the US presses India with a "take-it-or-leave-it" offer in bilateral trade negotiations - demanding sweeping access to India's agricultural, dairy, and pharmaceutical markets - New Delhi must draw critical lessons from how China successfully negotiated with Washington in June 2025. Unlike India, which is now reacting to ultimatums, China entered talks with pre-positioned leverage: a monopoly over rare earth exports, retaliatory legal frameworks, and an insulated domestic economy. India must shift its negotiation strategy from defensive tariff retention to assertive, leverage-backed diplomacy rooted in strategic chokepoints, industrial capability, and phased reciprocity. India Has Its Own Strengths First, India must build credible negotiation leverage rooted in operational chokepoints. China controlled the tempo of talks by targeting materials such as dysprosium that the US couldn't easily substitute. India has equivalent strengths in bulk generics, vaccine manufacturing, and digital services - critical nodes in global supply chains. Instead of pre-emptively offering tariff concessions, India should introduce targeted export approval mechanisms or destination-specific licensing for select pharmaceutical categories, such as complex generics and biosimilars, where US import dependence is structurally high. For digital services, India should temporarily pause new cross-border data transfer permissions in sectors such as fintech and health-tech until commercial access and data equivalence frameworks are secured from the U.S. As Good As One Gets Second, India must abandon the concessional mindset in market access negotiations and assert a strict reciprocity-based framework. If the US is demanding tariff reductions and the removal of quantitative restrictions in agriculture, dairy, and pharmaceuticals, India must counter with binding and verifiable commitments in return, such as regulatory streamlining, mutual recognition of standards, and preferential access in US government procurement. These must be structured as enforceable deliverables, not political assurances. China played this game precisely: export licences for rare earths were selectively granted to allies and withheld from adversaries until key concessions were extracted. India cannot allow sensitive sectors to be opened without tangible, sector-matched gains. Concessions must be calibrated and time-bound, with sunset clauses if the US fails to reciprocate. Look Deeper Third, India must confront the regulatory asymmetry embedded in US trade practices. While headline tariffs may appear low, US non-tariff barriers - including sanitary and phytosanitary (SPS) standards, drug import protocols, and origin compliance measures - function as covert trade restrictions. Indian consignments are routinely rejected for minor technical infractions, creating a chilling effect on exporters. The recent $500,000 consignment of Alphonso mangoes is one such example. These barriers are opaque, discretionary, and often non-negotiable. India must demand binding transparency commitments, risk-based inspection protocols, and pre-clearance mechanisms as preconditions to any tariff realignment. The US-UK "Economic Prosperity Deal" signed in May is a cautionary example: despite tariff concessions, the US retained core restrictions and gave London little commercial value. India must not accept an outcome where headline wins mask structural losses. Finally, India must impose its own negotiation architecture and sequencing. A modular, multi-phase agreement structure is essential. Begin with trade in services and digital commerce, where India enjoys a surplus and global competitiveness. Reserve tariff liberalisation in agriculture, processed foods, and medical devices for a second or third tranche, contingent on high-value quid pro quo, such as technology access, joint R&D platforms, and strategic investment windows. The US cannot expect a full-spectrum agreement aligned to its electoral timeline. India's objective must be to maximise strategic value per concession, not to rush a deal for diplomatic closure. China won by controlling the tempo and scope of engagement. India must now do the same-with precision, leverage, and a clear-eyed view of national interest.
Economic Times
21-05-2025
- Business
- Economic Times
U.S.-China trade truce has blown up again, and Huawei is at the center of it; here's how the situation could pan out
Live Events FAQs (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel China warned that anyone who helps the US restrict Huawei's chips could face legal trouble under China's Anti-Foreign Sanctions Law. China didn't say what kind of punishment people or companies would get if they break this law. China's Commerce Ministry said this in a statement on warning comes at a time when China is trying to improve relations with the US, so it adds tension, as per Bloomberg report. The US said that using Huawei chips in any country would go against its rules, as per later, the US removed the line about "anywhere in the world", making the rule less clear. China believes that past US actions against chips during Trump's time hurt recent trade talks in Geneva, as per China's official stand mentioned in Xinbo, a professor at Fudan University in Shanghai, said this new step from China shows that talks between the two countries are still going on, at least at a working level. Wu also said the challenge now is to keep the positive vibe from the Geneva talks alive and maybe even have high-level talks next Foreign Minister Ma Zhaoxu told David Perdue, the new US ambassador chosen by the Trump administration, that the Dragon is very much interested in fixing ties and collaborating economically with the United States , as per reports. The statement showing eagerness to engage by China came on the same day on which threats were issued by it for boycotting even after the truce, many big tariffs are still in place on Chinese goods. China is trying to keep the talks going, even though there are big fights still going on about US tech restrictions and China's control over rare also a serious issue where the US says China is linked to fentanyl entering the US, and wants China to help stop it, as per Bloomberg Webster, from Stanford University's DigiChina project, said the tariffs and tech fights are kind of separate issues with different logic. He also said if the US and China ever make a bigger trade deal, then the tech rules might also be discussed, as per the reports.Q1. Why is China angry about Huawei chip rules?China says US chip restrictions are unfair and hurt trade talks.Q2. Are the US and China still talking?Yes, they are still having meetings to improve relations.
Time of India
21-05-2025
- Business
- Time of India
U.S.-China trade truce has blown up again, and Huawei is at the center of it; here's how the situation could pan out
China warned that anyone who helps the US restrict Huawei's chips could face legal trouble under China's Anti-Foreign Sanctions Law. China didn't say what kind of punishment people or companies would get if they break this law. China's Commerce Ministry said this in a statement on Wednesday. This warning comes at a time when China is trying to improve relations with the US, so it adds tension, as per Bloomberg report. The US said that using Huawei chips in any country would go against its rules, as per reports. But later, the US removed the line about "anywhere in the world", making the rule less clear. China believes that past US actions against chips during Trump's time hurt recent trade talks in Geneva, as per China's official stand mentioned in Bloomberg. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Never Put Eggs In The Refrigerator. Here's Why... Car Novels Undo Wu Xinbo, a professor at Fudan University in Shanghai, said this new step from China shows that talks between the two countries are still going on, at least at a working level. Wu also said the challenge now is to keep the positive vibe from the Geneva talks alive and maybe even have high-level talks next month. Vice Foreign Minister Ma Zhaoxu told David Perdue, the new US ambassador chosen by the Trump administration, that the Dragon is very much interested in fixing ties and collaborating economically with the United States , as per reports. The statement showing eagerness to engage by China came on the same day on which threats were issued by it for boycotting Huawei. Live Events But even after the truce, many big tariffs are still in place on Chinese goods. China is trying to keep the talks going, even though there are big fights still going on about US tech restrictions and China's control over rare minerals. There's also a serious issue where the US says China is linked to fentanyl entering the US, and wants China to help stop it, as per Bloomberg report. Graham Webster, from Stanford University's DigiChina project, said the tariffs and tech fights are kind of separate issues with different logic. He also said if the US and China ever make a bigger trade deal, then the tech rules might also be discussed, as per the reports. FAQs Q1. Why is China angry about Huawei chip rules? China says US chip restrictions are unfair and hurt trade talks. Q2. Are the US and China still talking? Yes, they are still having meetings to improve relations.
Newsweek
21-05-2025
- Business
- Newsweek
China Issues New Warning Over US Tech War
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. China may impose sanctions on companies that comply with U.S. restrictions on its homegrown technology, the Chinese government said on Wednesday. The Chinese Commerce Ministry said in a statement that the latest U.S. industry guidance—warning of possible penalties for American businesses that trade or use Chinese-made integrated circuits—was an "attempt to ban Chinese advanced-computing chips globally." The U.S. Commerce and Treasury departments did not respond to an emailed request for comment. The Chinese Embassy in Washington, D.C., told Newsweek it had nothing more to add beyond the ministry's statement. Why It Matters Washington argues that decoupling U.S. and Chinese tech is necessary because American scientific and technological know-how has inadvertently fueled the rapid modernization and expansion of China's armed forces. However, in trying to stymie China's chipmaking industry by making the use of Chinese products more prohibitive for Americans companies, the United States is also threatening a consequential sector for the Chinese economy as well as expected and possibly unexpected future gains in its defense industry. What To Know Beijing criticized Washington for specifically targeting Chinese telecoms giant Huawei, a state-linked enterprise that is leading the research, development and production of high-end semiconductors—sophisticated hardware that may decide the race for emerging technologies, including artificial intelligence and quantum computing. The Chinese Commerce Ministry, which called the U.S. guidance a violation of international trade law, said: "Any organization or individual who implements or assists in the implementation of the U.S. measures will be suspected of violating the Anti-Foreign Sanctions Law of the People's Republic of China and other laws and regulations, and shall bear corresponding legal responsibilities." China's rubber-stamp parliament passed the anti-sanctions instrument in 2021 to give Beijing the legal means to enact countermeasures against Western firms deemed to have harmed Chinese economic or political interests via their compliance with U.S. sanctions. Last week, the U.S. Commerce Department's sanctions-enforcing Bureau of Industry and Security said Huawei's chips were likely developed in violation of U.S. export controls and that American businesses using the Chinese tech would also be breaching the sanctions regime. Although under direct threat from the U.S. restrictions, Huawei is advancing in indigenous chipmaking. Chinese AI firms such as DeepSeek are likely to turn to Huawei's latest Ascend circuits to power their machine models in the absence of U.S. alternatives, in what is becoming a central part of the tech war and holds national security implications. What People Are Saying The Chinese Ministry of Commerce said in a statement issued on Wednesday: "Innovation, development and win-win cooperation are the general trend. China urges the United States to immediately correct its wrong practices, abide by international economic and trade rules and respect the rights of other countries to scientific and technological development." What Happens Next For now, Chinese tech startups reliant on domestic chipmakers may find their supercomputing capabilities limited by current market options, but U.S. industrial policy can only go so far—delaying rather than denying Chinese advances in the technologies of tomorrow. As wider U.S.-China trade talks continue amid the 90-day truce agreed this month in Geneva, it appears the issue of high technology is quickly becoming a nonnegotiable for both sides.
Yahoo
21-05-2025
- Business
- Yahoo
US-China Tensions Over Chips Risk Hurting Trade Truce, Dialogue
(Bloomberg) — US-China tech tensions are flaring again, with Beijing threatening legal action against anyone enforcing Washington's restrictions on Huawei Technologies Co.'s chips, casting a shadow over a recent trade truce and efforts to sustain dialogue. Can Frank Gehry's 'Grand LA' Make Downtown Feel Like a Neighborhood? Chicago's O'Hare Airport Seeks Up to $4.3 Billion of Muni Debt NJ Transit Makes Deal With Engineers, Ending Three-Day Strike China's Commerce Ministry said in a Wednesday statement that entities could breach the Anti-Foreign Sanctions Law by assisting in the US curbs, without specifying the punishment. The move escalates the tech dispute even as Chinese officials express their wish to improve relations. The US Commerce Department had warned that using the Huawei semiconductors 'anywhere in the world' would violate US export controls before later removing the place reference. China has said the Trump administration's actions on chips undermined recent trade talks in Geneva. Wu Xinbo, director at Fudan University's Center for American Studies in Shanghai, said the amendment suggests continued contact between the two sides, at least at the working level. 'The challenge is how both sides can keep the momentum gained from the Geneva talks,' he said. 'I hope there can be high-level talks next month. But nothing's guaranteed at the moment.' On the same day of the Chinese warning, Vice Foreign Minister Ma Zhaoxu told new US ambassador to China, David Perdue, that Beijing hopes the US will work together to promote ties. This followed a meeting the day before between People's Bank of China Governor Pan Gongsheng and former US Treasury Secretary Timothy Geithner, now chairman of Warburg Pincus, according to a brief statement from the central bank. In a separate sitdown between Chinese Foreign Minister Wang Yi and Asia Society CEO Kyung-wha Kang on Tuesday, China's top diplomat said China and the US should work toward finding the right way to get along by fostering positive engagement in the Asia-Pacific region first. The flurry of exchanges comes after high-level talks in Switzerland earlier this month, where both nations agreed to a 90-day pause in some reciprocal tariffs, although substantial levies remain on Chinese imports. These interactions appear to be part of Beijing's effort to maintain dialogue while conflicts concerning US curbs on semiconductors and China's control over critical minerals show little sign of resolution. China's alleged role in fentanyl's flow into the US also remains a significant point of contention, with American officials pressing China for greater cooperation. The simultaneous trade thaw and persistent dispute over access to technology underscore the challenge of resolving the economic conflict between the world's two largest economies. 'My instinct is that tariffs are on a somewhat independent track from weaponizing supply chains. The logic is different,' said Graham Webster, who leads the DigiChina project at the Stanford University Cyber Policy Center. Webster suggested that if the countries reach a more comprehensive trade deal, 'the tech restrictions on one or both sides will be on the table.' Why Apple Still Hasn't Cracked AI Anthropic Is Trying to Win the AI Race Without Losing Its Soul Inside the First Stargate AI Data Center Microsoft's CEO on How AI Will Remake Every Company, Including His Cartoon Network's Last Gasp ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
