Why the US Lacks Leverage Over China on Trade
As the US-China trade truce inches closer to its expiration, a renewed urgency envelops Washington. The looming deadline has amplified discussions about the frazzled economic relationship, with calls for a new agreement growing louder. The failure of the former "phase one" commitments, which proved largely unenforced, casts a long shadow over future negotiations.
At the heart of the matter lies a stark power imbalance, with Beijing now commanding considerable leverage in key areas vital to both economies. Rare earth exports, crucial for a plethora of high-tech applications, give China an unmistakable upper hand. Furthermore, China’s significant role in global supply chains and its technological advancements amplify its bargaining power, making it increasingly difficult for the US to navigate the complexities of trade negotiations.
Economist George Magnus from Oxford University’s China Center sheds light on the intricacies of this economic tug-of-war. He articulates that while President Trump is advocating for a swift resolution, including potential adjustments to chip export controls, China remains firmly positioned within essential supply chains. This dynamic leaves the US grappling with the challenge of re-establishing leverage.
With the stakes escalating, the question remains: How can the US recalibrate its strategy to effectively engage with an assertive China? As this trade saga unfolds, the implications for both nations—and the global economy at large—promise to be profound.
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Video “Why the US lacks leverage over China on trade | DW News” was uploaded on 08/09/2025 to Youtube Channel DW News