No deal yet

It looks like the art of the deal is becoming challenging these days. After a victory lap last week where President Trump announced a set of agreements on the White House website regarding a potential sealed agreement between him and President Xi, information is coming out that challenges if in fact the deal is seen the same way by both parties and, more importantly, if they’re going to honor it. China is imposing conditions to a president that doesn’t want to be told what to do. These are: (1) don’t talk about Taiwan, (2) or human rights/democracy, or (3) China’s political system, and (4) don’t interfere in China’s development by cutting access to global markets, resources or technology. Although these are not new, it does look like they’re being reintroduced as part of the negotiations to tilt the balance of power. The U.S. needs rare earth minerals, and China needs the US consumers. China now produces a third of all non cutting edge chips in the world, and has a de facto monopoly in rare earth minerals processing, as well as pharmaceutical drug and electric batteries manufacturing. We may have reached another impass in negotiations. A catalyst is needed.

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