What are the latest sticking points in US-China tensions?

Beijing is stacking up its bargaining chips ahead of expected U.S.-China talks when Presidents Donald Trump and Xi Jinping visit Seoul this month, announcing new export controls to tighten its grip over high-tech manufacturing supply chains. The two superpowers look to be struggling to move beyond their current tariff truce – a 90-day pause from August 11 that ends around November 9 – with officials from both sides continuing to meet to discuss issues predating last month’s Madrid summit, widely seen as a breakthrough for its Tiktok deal, which would see the U.S. take a stake in one of China’s most successful companies overseas.

HOW THE TRADE WAR UNFOLDED

On February 4, Trump implemented an additional 10% tariff on imports from China demanding Beijing do more to stop the flow of fentanyl precursors into the U.S. China hit back with levies on some U.S. commodities, farm equipment and automobiles, as well as probes into several American businesses.

In April, Trump singled out China for tariffs exceeding 100% following his sweeping “Liberation Day” duties, while pausing the reciprocal tariffs he placed on some other countries the White House also deemed to be trading unfairly with the U.S. China retaliated, and over the next few weeks, both sides continued raising duties on each other’s goods – peaking in May – before agreeing on May 12 to their first 90-day pause, which also saw U.S. tariffs on Chinese goods fall from 145% to 30% and Chinese tariffs on American products drop from 125% to 10%.

There have been two more 90-day extensions since then, the latest agreed on August 11.

CRITICAL MINERALS

On Thursday, along with the addition of five new elements to its control list, Beijing unexpectedly announced export curbs on certain types of artificial diamonds and artificial graphite anode materials – other areas where China is the top producer – used in the production of semiconductors, quantum devices and advanced electronic systems.

Those curbs are set to take effect from November 8, just a day before the current truce expires. Xi and Trump are expected to meet on the sidelines of an Asia-Pacific Economic Cooperation summit prior to that. China, the world’s largest rare earths producer, has been tightening its control over these critical minerals, used in everything from lithium-ion batteries and semiconductors to aircraft engines, LED TVs, camera lenses, and much more. Earlier controls announced in April caused shortages around the world, before a series of deals with Europe and the U.S. eased the supply crunch.

SEMICONDUCTORS

One reason China has tightened its control over critical minerals is the U.S. has sought to limit its access to advanced semiconductors, critical for powering artificial intelligence models and applications.

U.S. lawmakers say that without these restrictions, China could reverse-engineer or independently develop advanced semiconductor technologies faster than the U.S., enabling China to not only dominate the industry but also gain a military edge.

China has repeatedly called on the Trump administration to remove such curbs, accusing Washington of trying to contain its legitimate economic development.

TAIWAN

Sensing that the Trump administration might be open to a deal that goes beyond traditional trade talks, there are reports that Beijing has renewed efforts to push Washington to alter the language the United States uses when discussing its position on Taiwanese independence.

China for a while now has wanted the U.S. to say “we oppose Taiwan independence,” rather than the current version, which is that the U.S. “does not support” the independence of Taiwan, which China claims as part of its territory.

BALANCED TRADE

Beijing also demands that the Trump administration remove the additional tariffs and ease restrictions limiting Chinese firms’ ability to invest in the world’s No.1 economy – a major source of friction that has not been resolved.

Chinese companies’ investments in the U.S. face intense scrutiny over concerns about technology transfer, cybersecurity, and dual-use military application, particularly in AI, aerospace, biotech, semiconductors and telecommunications. On the flip side, U.S. politicians have talked up a deal that would see China commit to buy more Boeing jets and raised the fact that the world’s biggest buyer of soybeans has yet to book any U.S. soybean cargoes.

FENTANYL

Despite Trump’s 20% fentanyl tariffs imposed in early 2025 to pressure China into curbing the flow of chemicals driving America’s deadly opioid crisis, Beijing has yet to publicly unveil any dramatic move to meet his demands. But China in June did announce that it had added two precursors to its list of controlled chemicals and arrested or prosecuted some 2,000 people for drug-related money laundering.