High-stakes trade negotiations between the U.S. and China continued into a second day Tuesday, as both sides sought to defuse a trade war that threatens both economies.
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Both countries have found pain points to exploit in the trade war, according to Anthony Rapa, co-chair of the international trade practice at law firm Blank Rome.
On the Chinese side, exports of rare earth minerals have hurt U.S. industries, especially automakers. The rare earth restrictions have also hurt U.S. allies, who may be adding diplomatic pressure on Trump to get a deal done, Rapa told Investopedia in an interview.
"Rare earths have become so essential to the supply chain, and it's been something that I think companies and countries around the world have been concerned about for a long time, which is that China has, for the time being, such a strong position in that part of the supply chain that if they ever were to flex a choke point there, that it could have a really negative impact on the world economy," he said.
For the U.S., Trump's restrictions targeting Chinese technology companies threaten to hinder China in the international competition to develop artificial intelligence.
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"US-China Trade Talks Go on for Second Day: Here’s What’s at Stake," by Diccon Hyatt was published in Investopedia on June 10, 2025.
