Latest news with #détente
CNN
6 days ago
- Business
- CNN
Beneath Trump's China truce, a race to find pressure points in high stakes game of ‘3D chess'
The United States and China have settled into a steady state of pragmatic, if uneasy, détente. Tariffs sit at unprecedented, but not economically debilitating levels. Three rounds of bilateral talks have steadily developed and expanded, with a fourth expected this fall. President Donald Trump and Chinese leader Xi Jinping are circling an in person meeting before the end of the year. 'I don't think anyone wants to see those tariffs snap back to 84%,' US Trade Representative Jamieson Greer said ahead of Trump's decision to sign off on a 90-day extension of the trade truce agreement put into place in May. But beneath the surface, Trump's trade war has dramatically accelerated efforts to find and demonstrate an ability to exploit vulnerabilities that will define the future of the relationship and shape the potential conflict for years ahead. China's grip on rare-earth elements, critical for electronics, defense equipment and other crucial products, has triggered an urgent scramble across the US government and its allies. Despite an agreement that China would unlock the supply of rare earths, US officials and corporate executives with knowledge of the acquisition and export process say there remain difficulties for critical industries, exceedingly granular demands for corporate data and a seemingly implicit effort to choke off some national security related purchases. 'It was a wakeup call to the world,' a senior White House officials said. 'That was a major thing in world geopolitics.' Xi's ability the choke off western access to essential components has become the dominant topic of discussion during all three rounds of bilateral talks so far. 'We're focused on making sure that the flow of magnets from China to the United States and the and the adjacent supply chain can flow as freely as as it did before the control,' said Greer, leading up to Trump's extension of the pause, as US and Chinese continued intensive technical discussions behind the scenes. 'And I'd say we're about halfway there.' At the same time, US technological advantages have sparked sharp rebukes and a push to rapidly ramp up capabilities in Beijing. The United States also probed clear choke points in supply for industries critical to China's economy. America imposed export controls for software tools, aerospace equipment and the sale of ethane, a major petroleum byproduct for China. The actions weren't heavily publicized – most of the coverage came from corporate securities filings or leaks from frenzied executives. Some of those executives were Republican donors, people familiar with the matter said, and raised concerns directly to Washington. The lobbying appeared to have little effect, as US officials leveraged the economic pressure as an unequivocal counter to China's rare-earth actions in the second round of bilateral talks. They were maintained in the immediate aftermath as US officials continued to press for quicker action on the matter. Shortly before the July 4th holiday, US Commerce officials notified major ethane producers the export controls had been rescinded. 'I am informing you that effective as of the date of this letter, the license requirements set forth in my June 1, 2025 and June 25, 2025 letters are hereby rescinded,' a top export administration official wrote in the notification letter sent July 2 to Enterprise Products Partners. Over the last several weeks, Trump clinched a rolling series of bilateral trade frameworks that have included explicit commitments to shore up US supply chain vulnerabilities and implicit agreements to shift production, supply chains and security assets away from Chinese influence. New penalties for 'transshipped' products – an additional 40% tariff on goods shipped from a high-tariff country to a lower tariff country prior to export to the US – have been put into place, with new regulations expanding their reach forthcoming. At the same time, China has grown more aggressive in pushing against regional players in territorial disputes as US officials have used Trump's brute-force tariff approach to build a nascent but deeply consequential new alignment that breaks from the global trading system the president has long pilloried. Even student visas for Chinese citizens have been leveraged for effect. Treasury Secretary Scott Bessent, Trump's lead negotiator in three rounds of trade talks with China, has told associates it's the equivalent of 'three-dimensional chess.' Bessent insists that the US now holds a clear advantage – a message he said he delivered directly to his Chinese counterparts last month during two days of negotiations in Stockholm, Sweden. 'I just said the world's with us now,' 'It looked in April, May like that the US was alone against the world,' Bessent said during a policy event with Breitbart news shortly after he returned from the third round of US-China trade talks. 'Now that we've done deals with our top trading partners, we have a lot more leverage.' The near-term goal, US officials say, is to utilize any leverage to accomplish Trump's overarching desire to secure a major trade deal with Chinese Leader Xi Jinping. Trump's trade agreements sharply diverge from any traditional 'trade deal' format and each remain devoid of the granular detail that historically takes years for negotiators to hammer out. There are significant questions about how much of what Trump has announced will actually become reality, according to diplomats and former trade officials, though administration officials say the threat of future tariffs serve as the ultimate dispute mechanism. But the decidedly Trumpian bespoke nature of the deals includes a series of significant commitments from countries like Japan and South Korea to provide hundreds of billions of dollars to the US for the explicit purpose of shoring up US supply chain vulnerabilities. Bessent, in an interview on Fox Business this week, described the unprecedented arrangement designed to use foreign capital for investments entirely subject to Trump's discretion as a way 'other countries are, in essence, providing us with a sovereign wealth fund.' 'We will be able to direct them as we re-shore these critical industries,' Bessent said. 'We are trying to de-risk the US economy.' Trump and his advisers have framed the size and structure of the commitments as a way for foreign partners to 'pay down' or 'buy out' of a higher tariff rate in bilateral talks. That option, however, is not on the table for Xi or his negotiators. 'The funds from the buyout are going to go to critical industries that we need to reshore,' Bessent said. 'And a lot of those need to be reshored away from China.' Still, the Trump's version of trade deals have created friction with the very partners viewed as a necessity in any new trade alliance to counter China's economic strength. Japanese officials have raised concerns with the way the structure and delivery have been framed by US officials, which in turn created domestic backlash for the critical Indo Pacific ally. 'The other party is not a normal person,' Japanese Prime Minister Shigeru Ishiba said of Trump earlier this month to members of parliament demanding details of the US-Japan agreement. 'In negotiations like this, implementation is far more difficult than reaching an agreement.' Ishiba's comment wasn't framed as a criticism, but instead a candid expression of reality. 'It's a feature, not a bug,' a senior administration official said of how the administration took the comments. 'He's stating a fact, and one that we use to our advantage.' But the rapidly evolving tools deployed across economic, security and diplomatic actions – since Trump initially triggered a de facto trade embargo between the two nations – has laid bare a far more existential reality: Trump needs China. The bilateral agreement to extend the temporary trade war truce this week came after a third round of negotiations framed by both sides as positive. Trump's advisers regularly cite his 'excellent' personal relationship with Xi and continue to weigh the possibility of a face-to-face meeting in China later this year. But, to accomplish that peace, Trump gave the green light for US companies to sell less-advanced artificial intelligence chips to China, drawing the ire of hawks within his own party. 'If he doesn't reverse this decision, it may be remembered as the moment when America surrendered the technological advantage needed to bring manufacturing home and keep our nation secure,' Matt Pottinger, Trump's first term deputy national security adviser, wrote this week with Liza Tobin, who served as China director on the National Security Council in during Trump's first term and under former President Joe Biden. Trump officials counter that the chips represent lower-tier technology and the highest end of the US chip stack isn't will remain blocked. More critically, they say, Chinese access to the chips would anchor the rapidly developing global AI race to US technology at the same time Trump, in a series of Oval Office meetings and calls over the last several weeks the CEOs of the largest tech firms in the world, has offered exemptions from forthcoming semiconductor tariffs in exchange for commitments to manufacture in the US. 'His objective is to get semiconductor manufacturing done here of our best technology and that way we can control it the best,' Commerce Secretary Howard Lutnick said last week. 'That's the strategy.'
CNN
6 days ago
- Business
- CNN
Beneath Trump's China truce, a race to find pressure points in high stakes game of ‘3D chess'
The United States and China have settled into a steady state of pragmatic, if uneasy, détente. Tariffs sit at unprecedented, but not economically debilitating levels. Three rounds of bilateral talks have steadily developed and expanded, with a fourth expected this fall. President Donald Trump and Chinese leader Xi Jinping are circling an in person meeting before the end of the year. 'I don't think anyone wants to see those tariffs snap back to 84%,' US Trade Representative Jamieson Greer said ahead of Trump's decision to sign off on a 90-day extension of the trade truce agreement put into place in May. But beneath the surface, Trump's trade war has dramatically accelerated efforts to find and demonstrate an ability to exploit vulnerabilities that will define the future of the relationship and shape the potential conflict for years ahead. China's grip on rare-earth elements, critical for electronics, defense equipment and other crucial products, has triggered an urgent scramble across the US government and its allies. Despite an agreement that China would unlock the supply of rare earths, US officials and corporate executives with knowledge of the acquisition and export process say there remain difficulties for critical industries, exceedingly granular demands for corporate data and a seemingly implicit effort to choke off some national security related purchases. 'It was a wakeup call to the world,' a senior White House officials said. 'That was a major thing in world geopolitics.' Xi's ability the choke off western access to essential components has become the dominant topic of discussion during all three rounds of bilateral talks so far. 'We're focused on making sure that the flow of magnets from China to the United States and the and the adjacent supply chain can flow as freely as as it did before the control,' said Greer, leading up to Trump's extension of the pause, as US and Chinese continued intensive technical discussions behind the scenes. 'And I'd say we're about halfway there.' At the same time, US technological advantages have sparked sharp rebukes and a push to rapidly ramp up capabilities in Beijing. The United States also probed clear choke points in supply for industries critical to China's economy. America imposed export controls for software tools, aerospace equipment and the sale of ethane, a major petroleum byproduct for China. The actions weren't heavily publicized – most of the coverage came from corporate securities filings or leaks from frenzied executives. Some of those executives were Republican donors, people familiar with the matter said, and raised concerns directly to Washington. The lobbying appeared to have little effect, as US officials leveraged the economic pressure as an unequivocal counter to China's rare-earth actions in the second round of bilateral talks. They were maintained in the immediate aftermath as US officials continued to press for quicker action on the matter. Shortly before the July 4th holiday, US Commerce officials notified major ethane producers the export controls had been rescinded. 'I am informing you that effective as of the date of this letter, the license requirements set forth in my June 1, 2025 and June 25, 2025 letters are hereby rescinded,' a top export administration official wrote in the notification letter sent July 2 to Enterprise Products Partners. Over the last several weeks, Trump clinched a rolling series of bilateral trade frameworks that have included explicit commitments to shore up US supply chain vulnerabilities and implicit agreements to shift production, supply chains and security assets away from Chinese influence. New penalties for 'transshipped' products – an additional 40% tariff on goods shipped from a high-tariff country to a lower tariff country prior to export to the US – have been put into place, with new regulations expanding their reach forthcoming. At the same time, China has grown more aggressive in pushing against regional players in territorial disputes as US officials have used Trump's brute-force tariff approach to build a nascent but deeply consequential new alignment that breaks from the global trading system the president has long pilloried. Even student visas for Chinese citizens have been leveraged for effect. Treasury Secretary Scott Bessent, Trump's lead negotiator in three rounds of trade talks with China, has told associates it's the equivalent of 'three-dimensional chess.' Bessent insists that the US now holds a clear advantage – a message he said he delivered directly to his Chinese counterparts last month during two days of negotiations in Stockholm, Sweden. 'I just said the world's with us now,' 'It looked in April, May like that the US was alone against the world,' Bessent said during a policy event with Breitbart news shortly after he returned from the third round of US-China trade talks. 'Now that we've done deals with our top trading partners, we have a lot more leverage.' The near-term goal, US officials say, is to utilize any leverage to accomplish Trump's overarching desire to secure a major trade deal with Chinese Leader Xi Jinping. Trump's trade agreements sharply diverge from any traditional 'trade deal' format and each remain devoid of the granular detail that historically takes years for negotiators to hammer out. There are significant questions about how much of what Trump has announced will actually become reality, according to diplomats and former trade officials, though administration officials say the threat of future tariffs serve as the ultimate dispute mechanism. But the decidedly Trumpian bespoke nature of the deals includes a series of significant commitments from countries like Japan and South Korea to provide hundreds of billions of dollars to the US for the explicit purpose of shoring up US supply chain vulnerabilities. Bessent, in an interview on Fox Business this week, described the unprecedented arrangement designed to use foreign capital for investments entirely subject to Trump's discretion as a way 'other countries are, in essence, providing us with a sovereign wealth fund.' 'We will be able to direct them as we re-shore these critical industries,' Bessent said. 'We are trying to de-risk the US economy.' Trump and his advisers have framed the size and structure of the commitments as a way for foreign partners to 'pay down' or 'buy out' of a higher tariff rate in bilateral talks. That option, however, is not on the table for Xi or his negotiators. 'The funds from the buyout are going to go to critical industries that we need to reshore,' Bessent said. 'And a lot of those need to be reshored away from China.' Still, the Trump's version of trade deals have created friction with the very partners viewed as a necessity in any new trade alliance to counter China's economic strength. Japanese officials have raised concerns with the way the structure and delivery have been framed by US officials, which in turn created domestic backlash for the critical Indo Pacific ally. 'The other party is not a normal person,' Japanese Prime Minister Shigeru Ishiba said of Trump earlier this month to members of parliament demanding details of the US-Japan agreement. 'In negotiations like this, implementation is far more difficult than reaching an agreement.' Ishiba's comment wasn't framed as a criticism, but instead a candid expression of reality. 'It's a feature, not a bug,' a senior administration official said of how the administration took the comments. 'He's stating a fact, and one that we use to our advantage.' But the rapidly evolving tools deployed across economic, security and diplomatic actions – since Trump initially triggered a de facto trade embargo between the two nations – has laid bare a far more existential reality: Trump needs China. The bilateral agreement to extend the temporary trade war truce this week came after a third round of negotiations framed by both sides as positive. Trump's advisers regularly cite his 'excellent' personal relationship with Xi and continue to weigh the possibility of a face-to-face meeting in China later this year. But, to accomplish that peace, Trump gave the green light for US companies to sell less-advanced artificial intelligence chips to China, drawing the ire of hawks within his own party. 'If he doesn't reverse this decision, it may be remembered as the moment when America surrendered the technological advantage needed to bring manufacturing home and keep our nation secure,' Matt Pottinger, Trump's first term deputy national security adviser, wrote this week with Liza Tobin, who served as China director on the National Security Council in during Trump's first term and under former President Joe Biden. Trump officials counter that the chips represent lower-tier technology and the highest end of the US chip stack isn't will remain blocked. More critically, they say, Chinese access to the chips would anchor the rapidly developing global AI race to US technology at the same time Trump, in a series of Oval Office meetings and calls over the last several weeks the CEOs of the largest tech firms in the world, has offered exemptions from forthcoming semiconductor tariffs in exchange for commitments to manufacture in the US. 'His objective is to get semiconductor manufacturing done here of our best technology and that way we can control it the best,' Commerce Secretary Howard Lutnick said last week. 'That's the strategy.'
CNN
6 days ago
- Business
- CNN
Beneath Trump's China truce, a race to find pressure points in high stakes game of ‘3D chess'
The United States and China have settled into a steady state of pragmatic, if uneasy, détente. Tariffs sit at unprecedented, but not economically debilitating levels. Three rounds of bilateral talks have steadily developed and expanded, with a fourth expected this fall. President Donald Trump and Chinese leader Xi Jinping are circling an in person meeting before the end of the year. 'I don't think anyone wants to see those tariffs snap back to 84%,' US Trade Representative Jamieson Greer said ahead of Trump's decision to sign off on a 90-day extension of the trade truce agreement put into place in May. But beneath the surface, Trump's trade war has dramatically accelerated efforts to find and demonstrate an ability to exploit vulnerabilities that will define the future of the relationship and shape the potential conflict for years ahead. China's grip on rare-earth elements, critical for electronics, defense equipment and other crucial products, has triggered an urgent scramble across the US government and its allies. Despite an agreement that China would unlock the supply of rare earths, US officials and corporate executives with knowledge of the acquisition and export process say there remain difficulties for critical industries, exceedingly granular demands for corporate data and a seemingly implicit effort to choke off some national security related purchases. 'It was a wakeup call to the world,' a senior White House officials said. 'That was a major thing in world geopolitics.' Xi's ability the choke off western access to essential components has become the dominant topic of discussion during all three rounds of bilateral talks so far. 'We're focused on making sure that the flow of magnets from China to the United States and the and the adjacent supply chain can flow as freely as as it did before the control,' said Greer, leading up to Trump's extension of the pause, as US and Chinese continued intensive technical discussions behind the scenes. 'And I'd say we're about halfway there.' At the same time, US technological advantages have sparked sharp rebukes and a push to rapidly ramp up capabilities in Beijing. The United States also probed clear choke points in supply for industries critical to China's economy. America imposed export controls for software tools, aerospace equipment and the sale of ethane, a major petroleum byproduct for China. The actions weren't heavily publicized – most of the coverage came from corporate securities filings or leaks from frenzied executives. Some of those executives were Republican donors, people familiar with the matter said, and raised concerns directly to Washington. The lobbying appeared to have little effect, as US officials leveraged the economic pressure as an unequivocal counter to China's rare-earth actions in the second round of bilateral talks. They were maintained in the immediate aftermath as US officials continued to press for quicker action on the matter. Shortly before the July 4th holiday, US Commerce officials notified major ethane producers the export controls had been rescinded. 'I am informing you that effective as of the date of this letter, the license requirements set forth in my June 1, 2025 and June 25, 2025 letters are hereby rescinded,' a top export administration official wrote in the notification letter sent July 2 to Enterprise Products Partners. Over the last several weeks, Trump clinched a rolling series of bilateral trade frameworks that have included explicit commitments to shore up US supply chain vulnerabilities and implicit agreements to shift production, supply chains and security assets away from Chinese influence. New penalties for 'transshipped' products – an additional 40% tariff on goods shipped from a high-tariff country to a lower tariff country prior to export to the US – have been put into place, with new regulations expanding their reach forthcoming. At the same time, China has grown more aggressive in pushing against regional players in territorial disputes as US officials have used Trump's brute-force tariff approach to build a nascent but deeply consequential new alignment that breaks from the global trading system the president has long pilloried. Even student visas for Chinese citizens have been leveraged for effect. Treasury Secretary Scott Bessent, Trump's lead negotiator in three rounds of trade talks with China, has told associates it's the equivalent of 'three-dimensional chess.' Bessent insists that the US now holds a clear advantage – a message he said he delivered directly to his Chinese counterparts last month during two days of negotiations in Stockholm, Sweden. 'I just said the world's with us now,' 'It looked in April, May like that the US was alone against the world,' Bessent said during a policy event with Breitbart news shortly after he returned from the third round of US-China trade talks. 'Now that we've done deals with our top trading partners, we have a lot more leverage.' The near-term goal, US officials say, is to utilize any leverage to accomplish Trump's overarching desire to secure a major trade deal with Chinese Leader Xi Jinping. Trump's trade agreements sharply diverge from any traditional 'trade deal' format and each remain devoid of the granular detail that historically takes years for negotiators to hammer out. There are significant questions about how much of what Trump has announced will actually become reality, according to diplomats and former trade officials, though administration officials say the threat of future tariffs serve as the ultimate dispute mechanism. But the decidedly Trumpian bespoke nature of the deals includes a series of significant commitments from countries like Japan and South Korea to provide hundreds of billions of dollars to the US for the explicit purpose of shoring up US supply chain vulnerabilities. Bessent, in an interview on Fox Business this week, described the unprecedented arrangement designed to use foreign capital for investments entirely subject to Trump's discretion as a way 'other countries are, in essence, providing us with a sovereign wealth fund.' 'We will be able to direct them as we re-shore these critical industries,' Bessent said. 'We are trying to de-risk the US economy.' Trump and his advisers have framed the size and structure of the commitments as a way for foreign partners to 'pay down' or 'buy out' of a higher tariff rate in bilateral talks. That option, however, is not on the table for Xi or his negotiators. 'The funds from the buyout are going to go to critical industries that we need to reshore,' Bessent said. 'And a lot of those need to be reshored away from China.' Still, the Trump's version of trade deals have created friction with the very partners viewed as a necessity in any new trade alliance to counter China's economic strength. Japanese officials have raised concerns with the way the structure and delivery have been framed by US officials, which in turn created domestic backlash for the critical Indo Pacific ally. 'The other party is not a normal person,' Japanese Prime Minister Shigeru Ishiba said of Trump earlier this month to members of parliament demanding details of the US-Japan agreement. 'In negotiations like this, implementation is far more difficult than reaching an agreement.' Ishiba's comment wasn't framed as a criticism, but instead a candid expression of reality. 'It's a feature, not a bug,' a senior administration official said of how the administration took the comments. 'He's stating a fact, and one that we use to our advantage.' But the rapidly evolving tools deployed across economic, security and diplomatic actions – since Trump initially triggered a de facto trade embargo between the two nations – has laid bare a far more existential reality: Trump needs China. The bilateral agreement to extend the temporary trade war truce this week came after a third round of negotiations framed by both sides as positive. Trump's advisers regularly cite his 'excellent' personal relationship with Xi and continue to weigh the possibility of a face-to-face meeting in China later this year. But, to accomplish that peace, Trump gave the green light for US companies to sell less-advanced artificial intelligence chips to China, drawing the ire of hawks within his own party. 'If he doesn't reverse this decision, it may be remembered as the moment when America surrendered the technological advantage needed to bring manufacturing home and keep our nation secure,' Matt Pottinger, Trump's first term deputy national security adviser, wrote this week with Liza Tobin, who served as China director on the National Security Council in during Trump's first term and under former President Joe Biden. Trump officials counter that the chips represent lower-tier technology and the highest end of the US chip stack isn't will remain blocked. More critically, they say, Chinese access to the chips would anchor the rapidly developing global AI race to US technology at the same time Trump, in a series of Oval Office meetings and calls over the last several weeks the CEOs of the largest tech firms in the world, has offered exemptions from forthcoming semiconductor tariffs in exchange for commitments to manufacture in the US. 'His objective is to get semiconductor manufacturing done here of our best technology and that way we can control it the best,' Commerce Secretary Howard Lutnick said last week. 'That's the strategy.'
CNN
07-07-2025
- Business
- CNN
The Trump-Musk breakup appears to be complete
The brief détente between Elon Musk and President Donald Trump took its last breath over the weekend, as the billionaire and once top Republican donor announced he would form a new political party. Musk distanced himself from his former role as 'first buddy' to the president, spending much of Independence Day weekend and Monday promoting his new 'America' party, while bashing both Republicans and Democrats. He even resurfaced unfounded conspiracy theories, accusing the Trump administration of misleading the public about disgraced financier and convicted pedophile Jeffrey Epstein. The breakup came after Trump signed his massive domestic policy agenda into law. Musk lobbied hard against the bill, arguing it adds too much to America's debt and undermines a great deal of the cost-saving initiatives he set out to achieve with his Department of Government Efficiency. In response to Musk's threat to start a new political party, Trump threatened to investigate the billionaire's government contracts and subsidies. Last week, Trump said DOGE may become a monster that may 'go back and eat Elon.' Musk, who once said he loves Trump 'as much as a straight man can love another man', responded with a sad-face emoji to one person on X who wrote that Trump had always planned to 'use you for his benefit and drop you right after but you didn't want to hear it.' 'The America Party is needed to fight the Republican/Democrat Uniparty,' Musk posted along with several memes suggesting the Democratic and Republican parties are the same. Instead of mounting a challenge to every seat across America — which would face legal and political hurdles — Musk said the party would instead focus on a handful of targeted Senate and House races. 'Given the razor-thin legislative margins, that would be enough to serve as the deciding vote on contentious laws,' he wrote. 'Extremely concentrated force at a precise location on the battlefield,' he wrote in another post about the party's strategy. It's not clear what, if any paperwork, has been filed with the Federal Election Commission, the Internal Revenue Service or any state-level entities. Several filings that appear to be trying to impersonate Musk's party, as well as some of his associates, have popped up. Musk said in a post on X he would be reporting at least one of them to the FEC. A spokesperson for Musk did not respond to a request for comment about organizational plans around the new party. Over the weekend, Trump dismissed Musk's third-party ambitions and called him a 'train wreck' in a long post on Truth Social. Musk responded by reposting memes suggesting he couldn't care less about the man he spent more than $275 million to get back into the White House. 'What is truth social, never heard of it,' Musk posted about the president's social media platform. Musk also resurfaced his accusations that the Trump administration was purposefully hiding information about the case surrounding the death of Epstein. The posts came as the Justice Department on Monday released a memo stating that Epstein had died by suicide and that there is no evidence he kept a 'client list' as alleged for years by conspiracy theorists. Musk over the past few days has not gone so far as to connect Trump personally to Epstein. But Musk made that allegation last month during his first public breakup with the president. Musk later deleted and expressed regret over those posts following phone conversations with Trump, Vice President JD Vance and White House chief of staff Susie Wiles. But one major indication that Musk has not yet completely cut himself off from the Trump administration: He still follows the president, as well as many of its top officials on X — for now.
