The US–China trade truce left defense minerals unresolved, plus China is unleashing a second global export shock -- China Boss News 6.20.25

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What happened?

The United States and China reached for détente in London barely two weeks ago, sealing a fragile handshake deal to pause their spiraling trade war.

But behind the official exchange of pleasantries, one vital issue remains unresolved.

China has not resumed export licenses for defense use of rare earth magnets, the linchpin of U.S. missile systems and stealth aircraft.

Washington, in turn, refuses to ease export restrictions on advanced AI chips—hardware that could supercharge China’s military edge.

Now it’s clear that Beijing is drawing a line: no minerals without chips.

In other words, what we’re seeing isn’t a US-China truce.

It’s a superpower standoff—recalibrated around the tech war, even more deadlocked.

Why it matters.

The Entity

As diplomats smiled for cameras in London, the real terms of engagement were being drawn elsewhere—in supply chains, export controls, and trade corridors weaponized by design.

In this clash of giants, what matters now isn’t market access, but control over code, inputs, and the industrial muscle behind them.

Meanwhile, the scramble has migrated—out of parliaments and into private rooms, where masters of algorithms, not treaties or headlines, now define the rules.

For decades, the Bilderberg Conference has been the subject of speculation and derision—a secretive transatlantic gathering of generals, spymasters, tech titans, and the stewards of Western capital.

On this year’s Stockholm agenda: AI, critical minerals, “defense innovation,” authoritarian rivalry.

China wasn’t named, but its presence hovered over every “non-market actors” and “strategic competition” euphemism.

In attendance were Palantir’s Peter Thiel and former Google CEO Eric Schmidt—two figures who blur the line between civilian tech and military doctrine.

Thiel, through Palantir and Founders Fund, has hardwired Silicon Valley into the U.S. defense state.

Schmidt, former chair of the National Security Commission on AI, led efforts to embed AI in Pentagon systems. He still advises the Defense Department and backs battlefield-ready tech—arguing the U.S.–China rivalry will be decided by who leads in AI.

At their Swedish convergence, the mood mixed strategic anxiety with tech acceleration—eerily mirrored in Mission: Impossible – Final Reckoning, now in cinemas.

Its villain is a rogue AI with no master; the climax, a high-altitude duel above South Africa for control of a device known as the “Poison Pill.”

It’s tempting to dismiss the symmetry.

But as leaders in London argued over chips and minerals, strategists in Stockholm were gaming out something deeper: a world where power lies not with states, but with systems—and their disruption.

And that scene—above the Drakensberg Mountains—lingered, heavy with analogy.

Thiel and Elon Musk: both South African-born. Both enriched by U.S. defense and semiconductor contracts. And both still frantically tethered to China’s supply chains.

In the race to control the world’s next operating system, AI, authoritarian alignments, and economic leverage—once abstract policy points—are now immediate, material concerns.

But this isn’t a clash of beliefs. It’s a decentralized arms race—fought with logistics, code, and compute, by both governments and private actors.

Eric Schmidt has warned: AI supremacy is a three-to-five-year race with China. The winner, he says, gets “the keys to control the entire world.”

Thiel has echoed the urgency, calling for “a very drastic reset” with Beijing.

Only one of the above-mentioned defense tech kings has broken ranks: Musk.

The Tesla CEO—with more ties to China than a bamboo scaffold—doesn’t make the annual defense pilgrimage to Bilderberg, for reasons that hardly need spelling out.

And this year, there were no reports of a change in the guest list.

A new arms race

At Bilderberg, no one had to say what everyone knew: the London talks had collapsed.

That shaky truce between Washington and Beijing—the one that briefly dominated headlines—had failed to deliver the one thing that mattered: critical minerals, the lifeblood of the West’s defense machine.

Since April, China has tightened its grip on their global flow, requiring case-by-case export licenses for materials essential to everything from EVs to guided missiles.

The result: delays, shortages, and a creeping unease in Western capitals. What once passed as commerce is now a slow, calibrated siege.

At this week’s G7 summit, the rare earth clash took center stage.

European Commission President Ursula von der Leyen accused China of weaponizing its dominance—despite recent signs of limited flexibility from Beijing.

She warned of a looming “new China shock,” driven by state subsidies and industrial overcapacity, and blasted China’s strategy as one of “dominance, dependency, and blackmail.”

Beijing fired back. Its Foreign Ministry dismissed the remarks as “baseless and biased,” accusing the EU of hypocrisy and “overreacting” to Chinese competitiveness.

But China’s curbs aren’t just blowback from tariffs—they’re a strategy decades in the making.

China controls 61% of rare earth extraction, 92% of refining, and nearly all of Europe’s magnet supply.

Its monopoly is no accident. The CCP has built a geopolitical moat—fortified by industrial policy, legal architecture, and the will to use it.

Exemptions are narrow, and military-grade materials remain off-limits.

Yet Beijing’s blockade of defense minerals marks a turning point: strategic resources are no longer just for sale.

Lithium, cobalt, and gallium are now levers of coercion, bargaining chips, and battlefield assets.

And Beijing isn’t stopping at extraction. It’s moving downstream—toward full-spectrum dominance of the value chain, from mine to missile.

Washington is waking up: defense planners are stockpiling, lawmakers are funding alternative processing, and industrial policy—once taboo—is back.

So, supply chains—once dismissed as logistical details—are now recognized for what they are: instruments of national power.

The problem? China has a good—read: bad—head start.

In sum, your grandfather’s Cold War was fought with manifestos and missiles.

This one runs on code, logistics, and metals no modern defense sector can do without.

This Week's China News

The Big Story in China Business

CHINA RELEASES ANOTHER ‘EXPORT SHOCK’ ON GLOBAL ECONOMY: CNN reporters were on the ground at the Port of Hong Kong, where crews in orange jumpsuits rushed to unload cargo from the ONE Modern—a vast container ship bound for Houston, Texas.

They have less than ten hours to turn it around. Time is short, and not just for them.

The clock is ticking on Trump’s tariff truce, set to expire August 12. And across the globe, companies are racing to move goods out of China before the next blow lands.

The first China shock, two decades ago, remade supply chains and manufacturing as Chinese goods flooded global markets.

The second is now unfolding—faster, sharper, and potentially more destabilizing.