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Investing.com -- Raymond James said in a note to clients that China’s latest export restrictions on rare earths “should be viewed as China seeking leverage ahead of the October 30–November 1 APEC Summit, where Presidents Trump and Xi are set to meet after several months of U.S.-China trade negotiations.”
The firm told investors that China’s prior restrictions were a key catalyst for the Trump administration to back off on restricting Nvidia’s H20 and AMD’s MI308 chips.
The analysts believe the move “could foreshadow a further relaxation of export restrictions on semiconductors and semi cap equipment,” especially as Washington pushes to make U.S. technology the default AI technology globally.
They added that while it is not without escalatory risk, the move “could compound existing momentum towards advanced tech restrictions being relaxed.”
Raymond James described the new rules as an “eye for an eye,” noting that the scope and intent of the Chinese restrictions closely mirror that of the U.S.
The firm feels Beijing could present an argument to Trump seeking an equivalent reduction in restrictions on rare earths and semiconductors, respectively, that “resonates with his transactional dealmaking style.”
The bank added that easing curbs was likely even before the Thursday announcement, citing “asymmetry in demands” where “Trump is seeking the meeting itself, as well as agricultural purchase commitments, progress on fentanyl, Chinese investment – and the resumed flow of rare earths,” while “China is seeking tariff relief and access to advanced U.S. technology.”
Raymond James also expects the development to support the ongoing critical minerals funding announcements in the U.S., including projects such as Ambler Road, Thacker Pass, and Alaska Range Resources.