Gavekal Technologies

The “constructive strategic stability” from last month’s Trump-Xi summit is better understood as an uneasy stalemate, as core flashpoints such as export controls and Taiwan remain unresolved. Despite Trump’s effort to sideline China hawks, Congress is advancing several export control bills. The most significant one is the MATCH Act. Even in a scaled-back form, with targeted controls on ASML’s advanced deep ultraviolet lithography (DUV) systems, the bill will almost guarantee a strong response from Beijing. Likely retaliations from China include tighter critical minerals controls targeting US-led advanced semiconductor and AI supply chains, and invocation of supply chain security-related regulations.

Nuclear power is back in business, thanks to the AI datacenter boom and renewed worries about fossil-fuel security following the closure of the Strait of Hormuz. Despite brave talk in the US, China is at the forefront of that revival and will remain so for another decade.