Trump may not have a choice: China holds an unexpectedly strong hand in the trade war.
Trump’s tariff threat came after China announced it would impose export controls to the U.S. on rare earth minerals. China controls up to 90% of the rare earth market, and the minerals are needed by the West for everything from high-powered magnets to defense equipment, and semiconductor computer chips.
There is good reason to believe that Trump and Xi will eventually work things out. U.S. tariffs on China (currently suspended) don’t actually come into effect until November 10, and Trump and Xi will likely both be at the Asia-Pacific Economic Cooperation summit that starts on October 31. China would like to renew access to Nvidia’s products, and Trump loves to make a deal, especially if he can do so face-to-face.
Here’s a snapshot of the markets ahead of the opening bell in New York this morning:
