For the doubters .. US and China3 Nov 2025 13:07
Good Morning,
Futures are trading higher ahead of today following what was a relatively quieter weekend & in regard to economic data, again, with the Govt. still remaining on shutdown, economic data of significance remains on pause although we still will get some sporadic datapoints like PMIs / ISM #’s & Fed speakers scattered throughout the week as well but otherwise, it should be a relatively quieter week all around, especially given the recent interim trade detente between the U.S. and China.
And speaking of the interim trade detente, there’s been a few interesting developments on the subject:
- For starters, all of the “rosy” parts of the deal are only being reported by the US as China has been fairly quiet on the subject. Almost as if the U.S. is trying to make the terms better than they actually are & more so make it look like the U.S. won these recent trade-tensions (When in actuality, they didn’t have the leverage to hold out).
- And secondly, another interesting & significant development actually was pointed out by $UAMY but essentially,
China’s Ministry of Commerce actually confirmed NEW export restrictions. On Oct 26, MOFCOM announced that tungsten, antimony, and silver will be added to China’s Key Export Supervision Catalog beginning November ‘25.
Exports will now require quota review and joint approval, replacing the prior self-reporting system. This means tightened export oversight through 2027 — not a relaxation of controls contrary to the belief. Once again, stresses that the U.S. needs to take the self-reliance of rare-earth off of China & make it a domestic / national security issue.
- And finally, the other notable development is the short excerpt I included above but essentially, as we had suggested but China gave the U.S. a 1-year grace period for a reason. Reasoning being, it’s nearly impossible for the U.S. to catch up to China within that period as it typically will take 2-3 years… China on the other hand plans to be fully self-reliant on their own chips to act as another act of leverage over the U.S. whereas the U.S. will still remain dependent on China. Takeaway here being, China really wants nothing to do with Nvidia chips, the only concession they want is a lower tariff rate & they will continue to pressure the US with the rare-earth overhang & there really isn’t much the U.S. can do about it.
Over the weekend, Scott Bessent made it a point of emphasis: “China has been putting their rare earth plan together for 25 years. The US has been asleep, but now this administration is going to move at warp speed over the next 1-2 years to get out from under this sword."
- Again, I struggle to see this trend going away & if anything, it’ll likely be severely amplified over the next year.
Moving along, into November, the other catalyst to watch for is the supreme course on Trumps tariffs. Supreme courts will hear the arguments on Wednesday & they will have until June to issue a
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