In October 2025, Donald Trump gave his meeting with Xi Jinping in Busan a 12 out of 10, which is a very good score, one of the best scores ever. The White House said that the historic agreement would, among other things, “effectively eliminate China’s current and proposed export controls on rare earth elements and other critical minerals” and “end Chinese retaliation against U.S. semiconductor manufacturers and other major U.S. companies.”
Now, a half-year later, Reuters reports that not all has been going as swimmingly as hoped (April 27, 2026).
Since last October, China has enacted laws to punish foreign entities that shift supply chains away from China, tightened the rare earth licensing regime, banned foreign AI chips from state-funded data centres, barred U.S. and Israeli cybersecurity software from Chinese companies and is weighing curbs on solar manufacturing equipment exports to the United States….
The truce, set to expire in November 2026, was forged in part by Beijing’s threats last year to restrict rare earth exports to the U.S. Those controls caused shortages across U.S. auto supply chains within weeks, helping to bring Trump to the negotiating table with Xi at a meeting in Busan, South Korea, analysts said.
China has not idly bided its time since then…
In April, Premier Li Qiang signed two regulations…granting authorities sweeping new powers to investigate foreign firms, governments and individuals accused of discriminating against China’s industrial and supply chains, and enforcing what Beijing calls “unjustified extraterritorial jurisdiction” against Chinese entities. Authorities may deny entry, expel and seize the assets of those found in violation.
The conflict in Iran sharpened China’s focus on new economic measures, particularly as U.S. Treasury Secretary Scott Bessent threatened in mid-April to sanction buyers of Iranian oil exports, of which China buys 80%….
The rules on supply chain and extraterritorial interference took effect immediately, with no opportunity for business feedback….
As the U.S. moves to reduce its dependence on Chinese critical minerals, China is racing to identify new choke points.
Working to decouple from Chinese supply chains would be a form of “discriminating against” Chinese supply chains.
Of course, all choices, including the choice not to keep banging your head against the wall, involve discriminating against some things in favor of others. Anyway, the People’s Republic of China seems to be saying that foreign firms and governments ought not phase out dependence on Chinese products but must instead end the dependence cold turkey. We should endeavor to oblige.
In particular, foreign firms continuing to directly expose themselves to the arbitrary dictates of the CCP by doing business in Red China should draft or accelerate plans for departure. The only problem is that the CCP might not let them leave.
You can’t really do business with the Chinese Communist Party.
