US and China pursue supply-chain leverage despite an extended truce

China and Washington target minerals, chips and critical inputs

The truce Washington and Beijing reached last year amid an escalating trade conflict has been extended until next January. In an analysis for The Guardian, Eduardo Porter wrote that it lowered the temperature between the two countries, ended tit-for-tat tariff escalation and opened the door to an as-yet undefined future agreement. Porter noted that Donald Trump’s trade wars had largely fallen off the headlines, although periodic tariff threats continued to surface. He cited Trump’s threat to end U.S. trade with countries that have deficits unless the Federal Reserve cuts interest rates. Porter wrote that the confrontation between the world’s two largest economies had drawn less attention. A photograph accompanying the analysis shows Xi Jinping and Trump at the White House on September 24, 2026. It is credited to Andrew Harnik/Getty Images.

Porter nevertheless wrote, “The sense of calm is misleading.” He argued that, under the radar, the world was moving toward an economic war of potentially epic proportions and that history suggested the confrontation could well spill over into military conflict.

Porter described China as becoming increasingly assertive and leveraging what he called its “overwhelming dominance” over the supply of critical minerals. Last year, Beijing throttled exports of rare earths and magnets to retaliate against U.S. tariffs and U.S. efforts to restrict China’s access to high-end semiconductors and the lithography machines needed to make them. Porter wrote that the move stunned the Trump administration. An accompanying photograph showed a girl visiting an installation about rare-earth production at the National Museum in Beijing, China, on March 24, 2026. It is credited to Maxim Shemetov/Reuters.

China has since relaxed some controls but continues to maintain many others, Porter wrote. He said Beijing has used the restrictions largely to retaliate against American actions and against other countries over a variety of policies China dislikes. China has announced a range of high-technology export restrictions covering artificial-intelligence chips and solar-power technology. Beijing has also threatened to punish countries that work to reduce their dependence on Chinese mineral inputs.

Washington is responding with its own supply-chain strategy. The Trump administration is investing hundreds of millions in projects to mine and process rare earths and other critical minerals, with the aim of narrowing China’s lead. It is also strengthening efforts to limit China’s access to frontier semiconductors and seeking to bar Chinese purchases of the machinery needed to manufacture them.

Porter assesses mutual assurances and military stakes

In Porter’s assessment, neither China nor the United States had established the mutual assurances needed to limit “the outbreak of new hostilities.” Porter said both governments were focused on gaining the upper hand in what “seems like” an inevitable next round. He wrote that both sides had defined the standoff as a national-security priority, essential to ensuring economic, technological and military supremacy.

The International Energy Agency estimates that if China blocked U.S. and European access to rare-earth magnets, it could cost their economies about $1.5tn per year. Porter said critical minerals are essential to high-tech civilian and military industries, and he noted that American fighter jets, submarines and missiles use rare-earth magnets. He described the supply-chain contest as a “new arms race” but said it differed from earlier weapons races because China and the United States were focused on making international supply chains resilient and on constraining, or throttling, supplies essential to a rival’s economic and technological progress. A photograph accompanying the analysis showed the port in Qinzhou, China, on October 22, 2026. It is credited to Costfoto/NurPhoto/Shutterstock.

Porter traces the strategies to Covid and Biden

The paired strategies reach back at least to the Covid pandemic, when Xi Jinping called on China to “tighten international production chains’ dependence on China, forming a powerful countermeasure and deterrent capability against foreigners who would artificially cut off supply [to China].” Porter treated the call as an early statement of Beijing’s effort to reduce its exposure to foreign supply restrictions.

Early in the Biden administration, national security adviser Jake Sullivan articulated the American goals: limiting China’s access to a narrow set of advanced technologies with military applications without upending the global economic order. Sullivan described the strategy as building a “small yard” of forbidden technology surrounded by a “high fence” of trade and investment controls. Porter said the conflict had breached the bounds of those initial rationales. Restrictions on American technology exports, investments and transfers to China proliferated over the following half decade, he wrote, affecting military capabilities and slowing China’s technological progress more broadly. He also said Trump’s use of tariffs was not helping.

Porter forecasts pressure on China’s trade strategy

Porter said a peaceful entente would probably require a shared understanding of what constitutes a legitimate national-security risk warranting action against supply chains. Defining the “yard” was essential, he wrote, and frustrations of standard commerce should not be dealt with on a wartime footing.

Porter projected that China will probably dominate renewable-energy technologies, especially the solar-power industry, into the foreseeable future and may also dominate the electric-vehicle industry. He said this might hurt in Brussels and Washington but “it’s not worth a war.” Porter also argued that China’s mercantilistic economic strategy is not tenable for the rest of the world because its combination of massive export growth with zero import growth is not sustainable. An accompanying photograph showed workers at a photovoltaic power-generation project site in Wenling, Zhejiang province, China, on October 27, 2026. It is credited to Zhou Xuejun/VCG/Getty Images.

Porter’s historical analogies and military risk

Porter wrote that the odds that the world economy would remain at peace seemed slim. He invited comparison with the Axis powers’ efforts to seize territories as the League of Nations curtailed their access to raw materials in the early stages of the second world war. He also cited FDR’s blocking of sales of American scrap steel and oil to Japan, which Porter said likely contributed to Tokyo’s decision to attack Pearl Harbor. He asked what would happen if China blocked access to rare-earth magnets used in American fighter jets, submarines and missiles.

The larger shift Porter describes is not simply a pause in tariff exchanges. He wrote that trade had once been proposed as perhaps the most powerful tool for delivering world peace through positive-sum interdependence among nations. “That’s over. Interdependence has become a vulnerability,” he wrote. As China and the United States fight over who will control the next generation of technology, “trade has become a theater of war,” he wrote.