@RushDoshi
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1/3 @Nvidia spokespeople are (again!) claiming (falsely!) that its products are not aiding China's military modernization. We @CSETGeorgetown have a bunch of evidence that, in fact, the PLA wants to buy a range of Nvidia chips, including those that are export-controlled.View quoted post on X
Yes, lets indeed worth correcting the scene here, as this is too important issue in US China relations to be mischaracterized. The perspective here is from someone in the trenches on the issues on a day to day basis, rather than from people who are assessing at a healthy distance, and may not appreciate the nuance of the situation.View quoted post on X
First. The Chinese export control licensing regime announced in April 2025 was not a response to the tariffs. As Jessice Chen Weiss and Gloria Xiong lay out brilliantly in the FA piece, the critical minerals controls started in the Biden administration, and really only in earnest in response to the October 2022 US export controls. foreignaffairs.com/china/how-chin…
For people who talk to Chinese officials regularly, the answer was even more clear that the rare earths were a direct, and of course delayed, response to the complexity and sweeping nature of the US controls in 2022, 2023, and 2024. It took MOFCOM and other Chinese ministries time to gain control of a fractious and complex industry of suppliers and traders.
One Chinese official commenting in 2026 noted that China’s addition licensing requirements rolled out in October 2025, were the key piece in “China’s full response to the October 2022 US controls.” So anyone trying to still argue that the Trump tariffs were the cause of Chinese rare earths regime is simply engaging in wishful thinking. The facts on the ground tell another story. In any case, no country could have even an incomplete licensing regime in place after just a few days, so the planning and preparation, including controls on gallium, germanium, graphite, indium, and other critical minerals well predates April 2025.
Second, “China was supposed to let rare earths flow, and they have not” is a fairly wildly inaccurate characterization of the reality on the ground. We still do not know exactly what China agreed to do, there was not statement from the Chinese side specific to rare earth licensing. What we know, again, from first had experience and not unsubstantiated conjecture, is that Beijing agreed to issue licenses, as the US does on controlled items, according to China’s export controls regulations. These regulations state that exports of rare earths and magnets are prohibited for military and defense industrial end use. So, China was not “supposed to” do anything, other than abide by its own regulations. The idea that the situation would go back to what held prior to April 2025 is a pipedream, and the fact that people continue to assert this shows how out of tough with reality they remain.
“US companies are not getting licenses.” This may be the most patently inaccurate of assertions here. Even USTR Greer and Treasury Secretary Bessent acknowledge that roughly 2/3 of licenses are being issued. I know personally of dozens of licenses for critical components and materials issued by MOFCOM just over the past month. MOFCOM has not issued guidance formally extending the suspension of its October 2025 rare earth controls. Until last Thursday, the Commerce Department had not issued a formal Federal Register notice of the extension of its suspension of the Affiliates Rule. Important context.
Third, the reason many people, not just Kyle, in industry rightly raise the issue of the massive backlog of BIS licenses that have not been issued to US companies, is that it seems rather strange to be criticizing MOFCOM for its licensing process, which is just as much, or more complex than that of BIS, and ignoring the licensing process in Washington. Of course these are not part of the formal process, but the are part of what every company impacted by licensing delays experiences, and some US companies are on both ends of these delays. Hence from an industry point of view, the US government should be raising these licensing issues in the context of asking about China’s licensing process. More important context.
Fourth, how does a former US government official know that “the licensing queue…is not existential for Chinese companies? Talk to any of them recently? The licencing queue, coupled with other existing controls, which many believe have produced more damage to US companies than any national security gain, are in fact existential to Chinese companies, and further controls, such as the MATCH Act, are clearly so. But understanding the linkages here is critical, and it is this broader context that matters here.
“But rare earths access is a gun to the head of the entire US economy.” Wow, quite the hyperbole. Understanding how wrong this is would be complex and take some time to explain, and also requires understanding of multiple complex supply chains.
First of all, a licensing regime is just that, a licensing regime. Were the US controls in October 2022 “a gun to the head of the entire Chinese economy?” One could make an argument that they were, even more so than with rare earths and the US economy. China responded with the rare earth controls, suggesting that the US controls were pretty serious.
“The entire economy”” Well, first of all, as noted, the vast majority of licenses are being issued, things are not as easy as they were before the licensing regime, but licenses are being issued, so no, not the “entire economy.” Hint, much of the US economy is services, not advanced manufacturing. What would be more accurate is to say that there are no licenses being given for rare earths and magnets for military and defense industrial end use. Just as the US is controlling semiconductors with potential military end uses. This is what great powers do.
So what does this all mean?
Yes, without real understanding in Washington that Beijing can and will respond to any escalation, and wants to see the Busan truce extended until the end of the Trump administration, we are in a world where the relationship will not be very stable, strategic, let alone constructive. But lets be clear about the causes of the situation, once you start weaponizing supply chains without a clear understanding of the potential consequences, you have to live with the consequences. Here we are.
Note: implementation of the Affiliates Rule and China's October 2025 controls and rare earths and magnets would be catastrophic for global supply chains. Here is the real gun held to the head of the global economy. So why don't both sides rescind the rules completely? That would show real strategic thinking. End Thread.
The more I learn about the insane relationship between the Trump Administration, Chinese spies, and AI billionaires, the more I’m convinced there is nothing this administration does that isn’t corrupt. Congress will investigate and get answers.View quoted post on X
There is no better avenue for incoming House & Senate Dems to take than hearings on wtf is going on with NVIDIA + Trump corruption + AI policy in the U.S.View quoted post on X
It has the virtue of riding the wave of anti-tech populism and directing that energy towards the productive need to stop selling these chips to China.
