The US-China trade conflict escalated as President Trump maintained his aggressive stance on tariffs, while Commerce Secretary Howard Lutnick affirmed that these rates would remain in effect. High-stakes trade talks in London ended with a deal, but its formal approval is pending from both Trump and Chinese President Xi Jinping. Despite China’s agreement to supply rare earth materials upfront, some importers are concerned about the limited six-month licenses granted for these vital resources, adding uncertainty to global supply chains. Investors responded cautiously. U.S. stock futures weakened, while Asian markets displayed a mixed performance, signaling that traders were adjusting to the new tariff reality. Treasury Secretary Scott Bessent offered a glimmer of hope by proposing a potential extension of the 90-day tariff pause for trading partners acting in good faith, including China. This move reflects the conflicting goals within the Trump administration – a desire for hardline stance versus a need to keep negotiations alive. However, even this possibility has failed to calm markets. The S&P 500 and Nasdaq 100 both dipped while gold prices rose, indicating traders are seeking safety in uncertain times. The tariff issue now holds the top spot as investors’ main concern, according to a recent poll, with almost two-thirds expressing worry about trade wars. Beyond the headline tariffs, a deeper battle is brewing over artificial intelligence (AI) chips. US export controls on China’s access to advanced semiconductors have hampered their progress in this field. China is investing billions in building its domestic chip ecosystem as a result. While companies like Huawei are catching up in some areas, they still lag in critical chipmaking equipment and memory chip production. This directly impacts tech stocks, particularly those involved in the global AI chip supply chain. The race for AI supremacy is now unfolding through tariffs and technology restrictions. The US-China trade war’s impact goes beyond just raw materials and extends to advanced technologies, creating a new landscape of uncertainty for investors.