Disagreements over the fine print of a recent U.S.-China trade breakthrough are casting a shadow over hopes for a new era of stability between the world’s two largest economies. On November 6, 2025, the U.S. and China appeared to reach an understanding to pause restrictions on the export of rare earth minerals—critical components for everything from smartphones to fighter jets. But as the dust settles, conflicting statements from Beijing and Washington reveal just how fragile this tentative thaw might be.
According to Reuters, the U.S. government announced that, as part of the deal, China would not only pause new rare earth export restrictions but also roll back controls imposed in April 2025. Yet, Chinese authorities have not publicly confirmed this commitment. In fact, regional officials in Inner Mongolia, a hub for rare earth mining, stated on social media that the April restrictions would remain in force. This contradiction has left business leaders and policymakers on both sides of the Pacific scrambling for clarity.
These tensions are playing out against the backdrop of the annual China International Import Expo (CIIE) in Shanghai, where battered U.S. exporters are seeking signs of hope after years of bruising trade battles. At the expo, American companies displayed everything from handbags to specialty foods, eager to rebuild relationships with Chinese buyers. Ming Tao Jiang, founder of Marathon Ginseng in Wisconsin, told AFP that the trade war—marked by tit-for-tat tariffs since 2018—has "decimated" his industry. "Before 2018 we had 200 registered growers in Wisconsin, in Marathon County... after the first and second round of tariff wars, adding insult to injury of Covid, we're down to 70," Jiang explained. His company’s ginseng, once a prized export to China, now faces a staggering 45 percent import duty.
Other U.S. exhibitors at the CIIE echoed Jiang’s cautious optimism but admitted that much uncertainty remains. Tara Qu, a trade representative for Idaho, noted that while the recent agreement to suspend additional tariffs is a step in the right direction, China still levies a 10 percent blanket tariff on U.S. imports. “We hope there will be a further reduction, so that trade can go back to normal,” Qu said. She highlighted the plight of Anderson Northwest, an Idaho bean and pulse producer, which has not exported to China since tariffs jumped by 20 percent earlier this year.
Eric Zheng, president of the American Chamber of Commerce in Shanghai, summed up the sentiment: “We certainly hope that there will be more reductions in tariffs, because tariffs are hurting everybody.” Zheng pointed out that Californian wines, for instance, currently face import duties exceeding 100 percent. The uncertainty, he said, has made it “very difficult to plan for the long term.” Still, Zheng welcomed the news that President Donald Trump and Chinese leader Xi Jinping plan reciprocal state visits in 2026, hoping these high-profile meetings will bring “a more stable environment, at least in the next year, if not beyond.”
But the trade dispute is only one piece of a much larger puzzle. As reported by the National Review, U.S. officials are increasingly framing economic rivalry with China as a national security issue. CIA Deputy Director Michael Ellis, speaking at the Federalist Society’s National Lawyers Convention in Washington, D.C., emphasized that “economic security is national security.” Ellis predicted that the Trump administration’s approach would increasingly involve direct agreements between the federal government and private companies in strategic sectors.
This strategy is already taking shape. In July 2025, the Department of Defense became the largest shareholder in MP Minerals by purchasing $400 million in preferred stock. MP Minerals operates the only rare earth mine in the U.S.—a critical asset given China’s dominance in the sector. Critics have compared this move to the kind of state-led industrial policy more often associated with China itself. The Pentagon, for its part, argues that such investments are necessary to secure supply chains for modern military technology.
The administration struck a similar deal with Nvidia, the leading American AI chipmaker, allowing it to continue selling chips to China in exchange for the U.S. government receiving 15 percent of the revenue. However, U.S. officials recently blocked Nvidia’s efforts to sell its most advanced AI chips to China, just ahead of Trump’s meeting with Xi Jinping. The company has also found itself at odds with congressional China hawks, who want to prioritize American buyers and restrict technology transfers.
Ellis warned that China has multiple levers of economic power at its disposal, including the ability to impose crippling export controls or flood global markets with cheap products to undercut competitors. “There are going to be a whole realm of areas where the mantra that ‘economic security is national security’ plays a larger and larger role,” Ellis said. He also stressed the need for closer cooperation between the intelligence community and the private sector, citing the CIA’s partnerships with venture capital firms and its own research labs.
“Private businesses cannot stand on the sidelines, because China’s fight against the U.S. is an all-fronts conflict,” Ellis told the panel, noting that corporate espionage is a key part of China’s strategy. Earlier this year, he warned in an Axios interview that maintaining America’s technological edge is essential for national defense. He also criticized previous U.S. administrations for spending billions on joint research with Chinese entities linked to the Communist Party, arguing that such collaborations may have inadvertently boosted China’s military capabilities.
Back on the trade front, American exporters remain caught between hope and apprehension. The recent agreement to pause certain punitive measures, while welcome, is clouded by the lack of consensus on which restrictions will actually be lifted. For businesses like Marathon Ginseng and Anderson Northwest, the difference between a 10 percent and a 45 percent tariff—or between open and restricted rare earth exports—can mean survival or bankruptcy.
Meanwhile, the broader U.S.-China relationship remains fraught with suspicion and strategic rivalry. The Trump administration’s willingness to intervene directly in critical industries signals a departure from decades of market-led globalization. Yet, as both countries seek to balance economic interests with national security imperatives, the path forward is likely to be anything but smooth.
For now, exporters, investors, and policymakers alike are watching closely—hoping that the next round of talks, and the planned presidential visits, will bring more than just symbolic gestures. The stakes, after all, are not just economic; they go to the heart of global power and technological leadership in the 21st century.
