The latest step in escalating tensions between the world’s two largest economies is US Secretary of State Marco Rubio’s salvo against Chinese students, promising to “aggressively revoke” their visas.
Despite a temporary tariff truce reached earlier this month, disagreements between Washington and Beijing persist. Recent disputes relate to higher education, artificial intelligence (AI) chips, and rare earth minerals.
Despite diplomatic efforts, China and the United States’ relations continue to worsen.
What tariffs did the US and China reach a deal on?
After Trump’s administration increased tariffs on Chinese goods earlier this year to 145 percent, with cumulative US duties on some Chinese goods reaching a staggering 245 percent, a US-China trade conflict developed. China retaliated by imposing own 125 percent tariffs on US goods.
After two days of trade talks in Geneva, a deal that was reached on May 12 resulted in a 90-day reduction in tariffs on both sides, with negotiators hoping to reach a longer-term agreement. Beijing has a 10% levy on US products while the US has for the time being a 30% tariff on all of its Chinese goods.
However, it appears that Washington and Beijing have only engaged in limited conversation in the weeks following the temporary reprieve.
US President Donald Trump and Chinese leader Xi Jinping may need to be called back on Thursday, according to US Treasury Secretary Scott Bessent, who told Fox News. Trade talks between the US and China are “a little stalled,” Bessent said.
In the interim, the Trump administration has placed new, stringent restrictions on Chinese university students’ visas and instructed US businesses to stop selling their advanced chip software to Chinese companies.
Why are Chinese students being targeted by the US?
Rubio made the announcement on Wednesday that the US would “aggressively revoke” Chinese student visas. He also made a pledge to increase the scrutiny of Chinese and Hong Kong new visa applicants.
The Trump administration’s decision to deport people and revoke student visas is a part of its broad-based efforts to advance its hardline immigration policy.
China is the second-largest country of origin for foreign students studying in the US, behind India. In the US during the academic year 2023-2024, there were more than 270, 000 Chinese students overall, accounting for roughly a quarter of all foreign students.
The decision to revoke visas was criticized by China’s Ministry of Foreign Affairs, who claimed it had “damaged” Chinese students’ rights. According to Mao Ning, a spokesman for the US, “the US has unreasonably suspended Chinese students’ visas under the pretext of ideology and national rights.”
On May 22, the Trump administration ordered Harvard University to stop accepting international students, accusing the school of “coordination with the Chinese Communist Party.” A US federal judge has since blocked that action.
The majority of foreign students at Harvard, or almost 1,300, are Chinese, and many senior officials, including current leader Xi Jinping, have sent their kids there as well.
How are Chinese semiconductors being targeted by the US?
The US Commerce Department issued a warning to American companies on May 13 that Huawei’s Ascend AI semiconductor chips were likely developed or produced in violation of US export controls, shortly after the talks in Geneva.  ,
The Trump administration’s latest effort to stymie China’s ability to create cutting-edge AI chips was the latest. The US and China have long been at odds with the tiny semiconductors that power AI systems.
A representative for China’s Commerce Ministry refrained from criticizing the guidance last week, accusing Washington of “undermining” the Geneva consensus and calling the measures “typical unilateral bullying and protectionism.”
The US government then stepped up the conflict on May 28 by enforcing a law mandating US companies that sell their products and services to Chinese companies, according to The Financial Times.
The US Commerce Department issued letters to companies that manufacture design automation software, including Cadence, Synopsys, and Siemens EDA, to advise them to stop using their technology in China.
Why are Chinese semiconductors being targeted by the US?
For more than ten years, the US has placed stricter restrictions on semiconductor exports, arguing that China has improved military hardware and software through US computer chips.
Chinese government officials and business leaders refute this and claim that the US is attempting to halt China’s growth.
Trump forbade China’s Huawei from using cutting-edge US circuit boards in his first term as president.
Huawei is seen as a market leader for US semiconductor company Nvidia, which produces its own-brand “Ascend” AI chips under the name of “Ascend.” Washington imposed a ban on Nvidia’s AI chips’ exports to China in April.
However, Jensen Huang, the CEO of Nvidia, recently warned that export controls had largely failed in China’s AI technology.
How might US policies impact China?
Supply shortages for the aerospace equipment required for China’s commercial aircraft, the C919, a key initiative in China’s effort to become economically and environmentally self-sufficient, will be limited by the sales suspension of semiconductors.
Former CIA China analyst Christopher Johnson claimed that the new export restrictions this week “underlined the innate fragility of the Geneva agreement.”
The risk of a ceasefire breaking even within the 90-day pause is omnipresent, he added. “With both sides wanting to keep and continue demonstrating the potency of their respective chokehold capabilities, we must keep trying.”
Will China stifle exports of rare earth minerals?
According to US officials, China should ease its export restrictions on rare earth elements as a result of the Geneva discussions. However, that hasn’t shown much to the contrary so far.
A wide range of products are produced using rare earth minerals, which are a group of precious minerals that are needed for the defense, healthcare, and technology industries.
The production of capacitors, which are electrical components that power AI servers and smartphones, is also a key priority for rare earth metals like scandium and yttrium.
In April, China implemented export controls in response to Trump’s “Liberation Day” tariffs, which sparked concern among US businesses.
For instance, Ford temporarily shut down a factory in Chicago last week because one of its suppliers ran out of a specialized rare earth magnet.
These high-tech magnets are used in parts like the brake and steering systems, power seats, and fuel injectors in most new cars, especially elevate vehicles (cars that have robotic technology that allow them to “climb” over obstacles).
