executive summary: This essay examines the U.S.-China trade war in 2025 as a possible turning point in the U.S.-China competition, arguing that the trade war created new power dynamics around a supply chain race that centers on leveraging chokepoints in critical minerals and advanced technologies. main argument The 2025 trade war fundamentally altered U.S.-China strategic competition. What began as a tariff dispute rapidly evolved into a supply chain war in which both sides sought to exploit single-source chokepoint vulnerabilities. These events revealed asymmetrical advantages and vulnerabilities on both sides: China holds a commanding advantage in critical minerals and magnets (and possibly other sectors) that are essential to U.S. defense and civilian industries, while the U.S. retains leverage through its dominance in advanced semiconductors and global financial networks. The result is a new bilateral dynamic best described as a race, with each side scrambling to reduce its own exposure while accumulating leverage over the other. A fragile stability has emerged from this mutual economic disruption, but it rests on shifting political calculations rather than structural interdependence, and the underlying competition continues to intensify across economic, technological, and geopolitical arenas. policy implications • U.S. policymakers will be constrained in their trade negotiations with China given its leverage and confidence that arise from its dominance of critical mineral supply chains. The U.S. should also recognize that its national security export controls are now a core bargaining chip in economic negotiations with China, which has advantages and limitations. • U.S. policymakers must accelerate their efforts to reduce these vulnerabilities, including through supply chain diversification, enhanced coordination with allies on export controls and investment screening, and expanded domestic investments. Effective U.S. competition will require unprecedented coordination among government agencies and the private sector, as well as a credible, long-term commitment to building resilient supply chains in semiconductors, critical minerals, and other strategic sectors. • The current period of stability in U.S.-China relations should not be mistaken for a durable equilibrium. The U.S.-China framework reached in Busan in October 2025 rests on time-limited agreements and the personal diplomacy of two leaders, not structural constraints.
Evan S. Medeiros (Wed,) studied this question.