China Trade Talk Result Depends Upon the Spin
Trade talks between China and the US have ended for now, with a formal report to be issued on Monday May 12th... but the result depends upon the spin.
Link here: US-China agree to ‘trade consultation mechanism’, conduct further talks, He Lifeng says ...where the (Hong Kong) media is perhaps unreliable: https://www.scmp.com/news/china/diplomacy/article/3309922/no-deal-sight-yet-china-and-us-enter-day-2-trade-talks-cool-tariff-tensions
From China's Xinhua News, allusion to a 'deal', but the details are ambiguous and not specific:
"Flash: Chinese vice premier: China-U.S. economic, trade ties mutually beneficial, win-win in nature"
https://english.news.cn/20250512/cf373c9f3f7c405a8b15086e4acf44e2/c.html ..however, I just don't see specific detail from China's Xinhua news.
Trump is, of course, spinning as he always does. Trump is desperate because he broke important trade relations -- as only a dodgy realtor could -- and China knows that. Trump hopes to boost flagging US debt and equity (Wall Street) markets, where the US debt market is showing particular strain. China holds the cards, while the US slips further down the slope of hegemonic oblivion, and of course Trump wants to present a positive spin instead.
One primary factor is China freezing out TSMC. China has already mastered a new EUV chip etching process of sub 7nm, and does not require collective west or TSMC equipment to do that. So far TSMC is still surging, with the collective west media pushing the TSMC AI narrative for all that it is worth. (TSMC is based in Taiwan.) But if China has truly frozen TSMC out of China's chip production, that will be a big move going forward. The TSMC issue might leverage pressure for the US to confront China over Taiwan, but Rubio has said the the US still respects the One China policy that Nixon established in 1972. (sort of)
(Of course what a US poltico says in one moment out of one side of his mouth can be refuted / denied in the next out of the other side. And that's very much how Dear Stormy's folks roll..)
Another US issue is that China has limited exports of gallium and germanium to the former United States. Those elements are used in the weapons of war that GD/LMT "investors" love so much, and if some dealer somewhere in China can trade for the right amount of shekels, that trade will happen. So far, the trade laundering capitals of Antwerp and Luxembourg have been enabling that trade via dodgy China mining brokers.
In my opinion, the bigger issue is for the large chip corporates like Intel and AMD (especially) that rely on TSMC for production. If China can shut that chip distribution flow down, it will give China a huge advantage over the corrupt and criminal west. So far China seems unwilling to truly confront the collective west in that manner, perhaps due to political problems with Hong Kong, Taiwan, and wealthy oligarchs (representing some political power) within China.
How far along China is with its own mainland EUV chip etching facilities is a highly classified topic (in China) and whether their producers can go it alone now (in AI and weapons technology chips) is up for debate.
Bottom line is that the over-fed liar in the White House broke things. He must now do what he is best at - lying and blustering -- on all fronts, whether about trade, the Ukraine, Iran, Gaza, Taiwan, Syria, Israel, or anything else. For now Trump's public lies are the only trump card ad hoc mechanism supporting US markets and hegemony.
Steve Brown
