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Personally, I would not put any more stock into that announcement than in the announcement about the autism-paracetamol link. Trump has been known to chicken out before.
I am also unsure what the CCP really wants. Perhaps getting full access to ASML products is really the hill they want to die on. Or they could be satisfied with a bunch of AI chips. Or it might be about Trump's tariffs.
My understanding is that REE refining infrastructure is something the US could easily sink a whole lot of money in before getting anywhere, even if the goal is just strategic and not competing on the REE world market.
That is kinda the difference between REE and chip manufacturing: if you can only build chips which have a feature size 10x larger than the latest TSMC fabs, there are still a lot of niches you can compete in. If you can only refine REE at 10x the costs that China has, you will not be able to compete once they undo their embargo.
I think the market-based way the US could handle this is to commit to buying a certain amount of REE which is refined without tech from China per year for their defense sector for the foreseeable future. Of course, future presidents may not honor such a commitment. The alternative is that the US directly invests in such firms.
Personally, I think Trump will try to give the CCP what they want, especially if it is just some AI chips instead of the capability to build their own.
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