1 April 2025

Limits of Economic Deterrence in the US-China Tech Competition

Rogier Creemers and Louise Marie Hurel

A week before reaching a deal, US President Donald Trump said he wanted $500 billion worth of Ukraine’s critical minerals as compensation for having supported the country following the full-scale invasion by Russia in February 2022. The offer, then rejected by Ukraine’s president Volodymyr Zelensky, was followed by threats to cut the country’s access to Starlink’s satellite communications system if it did not reach a deal. At the core of the US government’s pressure lays, among other things, its desire to diminish US dependency on the country that holds almost half of the world’s critical minerals reserves essential for tech development: China.

Only 12 days following the inauguration of Trump’s second presidency, the administration announced a fresh set of 10% tariffs on imports from China—shortly thereafter increased by an extra 10%. China followed with a retaliatory set of measures including antitrust probes into US tech companies, 10-15% tariffs on farm products, coal, crude oil and farm equipment, and expansion of export controls on critical minerals that are essential in producing everything from smartphones to F-35s and solar panels.

Trump’s latest rush to secure critical minerals in Ukraine, a country that currently does not produce them (despite having them) and cannot ensure easy access to them during an ongoing war, raises the question of how ready they are to deal with pressures from their trade war with China – particularly in realms of high technology. How quickly and effectively can they respond to, and anticipate changes to critical supply chains feeding key sectors such as defence and technology? How effective have US economic deterrence measures been to stop Chinese tech?

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