U.S., China, and Iran trade relations, rail corridors, African mineral supply, and Tantalum Capacitors

Welcome back to TAXING TARIFFS! This post, at the end of May 2026, initially zooms out from the Iran focused U.S. geopolitical situation in order to gain a more comprehensive, though by no means complete, understanding of global positioning among a subset of key global players. To accomplish that as succinctly and as best we can we trace a route from China to Iran and keep African minerals and tariffs in sight.

A balanced assessment of the current U.S. situation may go something like this; President Donald Trump of the United States recently met with President Xi Jinping of The People’s Republic of China to negotiate on many aspects of trade between the two countries and their other trading partners, as well as many other issues not the least of which is Taiwan. Okay, let’s be honest, probably most of which is Taiwan. This occurred during a ceasefire in an ongoing set of conflicts, some say “war”, in the Middle East. Iran, the U.S., and Israel are the top combatants, though there are many more nations involved. Pakistan and China have been participants, and Pakistan a host, in the negotiations between the U.S. and Iran to end the conflict or at least extend the tenuous ceasefire.

We begin our limited, yet detailed, assessment of relations amongst China, Iran, and the U.S. and avoid including Israel or other nations. China’s goals can be assessed by considering the ambitious nature of its Belt & Road initiative that they began undertaking in 2013. These concerted efforts towards creating new trade routes and establishing connectivity on a global scale have borne much fruit. There is at least one fruition of those efforts that leads directly from China to Iran. The China-Iran railway is a land-lifeline that bypasses maritime choke points such as the Strait of Hormuz and the Malacca Strait. It is an overland trade route and strategic supply corridor connecting Western China to Iranian ports on land (dry). Spanning approximately 10,400 (km) the route runs from Xi'an and Yiwu hubs in China through Kazakhstan, Uzbekistan, and Turkmenistan into Tehran, Iran. Therebye reducing minimal delivery times from up to 40 days by sea (not including disruptions) to just 15 days by rail. The difference between 40 days and 15 days is worthy of bigtime discussion when talking about supply chain efficiencies.

Since May 1 of this year, Beijing expanded its 2024 decision to grant tariff-free access to 33 least developed African nations and has now (as of May 1 st ) removed tariffs on all goods from 53 of 54 African nations. Only Eswatini was not included. Eswatini maintains diplomatic ties with Taiwan. These tariff maneuverers very much constitute a part of China’s increasing emphasis on expanding trade flows and supply relations, as well as financing industrial and municipal infrastructure projects throughout Africa. Put another way, more Belt & Road.

Africa’s largest trading partner is China. Their exports to China reached nearly $125 Billion US dollars in 2025 as opposed to far less than $50 US Billion exported to the U.S. To be balanced in our assessment, the U.S. has extended through December 31, 2028, under H.R. 6500 – 119 th Congress, the duty-free treatment of the products of beneficiary Sub Saharan African countries under the Trade Act of 1974 (specifically, the Generalized System of Preferences) and the African Growth and Opportunity Act (AGOA). There are 32 countries eligible for AGOA which allows eligible countries to export about 7,000 or so products without paying “standard” tariffs. Both China and the U.S. want in on Africa.

Now let’s get to the mineral side of these relations which lead to the electronics side of the story (pun intended). Both China and the U.S. are keen on securing supply chains for critical minerals form Africa such as cobalt, copper, and coltan. Cobalt and copper, though important, we’ll put aside (for now) and focus on coltan. Coltan is an ore which is primarily supplied to the world from the Democratic Republic of Congo. It contains the oxide minerals columbite and tantalite which are very significant sources of niobium and tantalum. Now let’s leave the niobium out of this too and focus even more on tantalum.

Tantalum capacitors are a significant part of the electronics manufacturing industry. Think lollipop-shaped two-stick capacitors with a muted gritty yellow coloration. Those capacitors contain anywhere from 5 to 20% tantalum. Exports from tantalum rich Congo to China were over $20 US Billion for the last two full years. Congo exports to the U.S on the other hand barely averaged $1 US Billion over the past decade.

Do you have any thoughts on the current ceasefire situation between the U.S. and Iran? What about China’s inroads to Iran and efforts in Africa? Is there a clear path forward for the U.S. with Iran and China? Let us know at taxingtariffs@microncorp.com and we’ll see you next time on TAXING TARIFFS.

President Trump’s visit to Beijing to meet with President Xi Jinping and the implications therein with regards to Taiwan

Welcome back to TAXING TARIFFS! In this post we’ll get a quick update on the military conflicts in the Middle East before focusing on President Trump’s visit to Beijing to meet with President Xi Jinping and the implications therein with regards to Taiwan.

Much of the world is focused on the Strait of Hormuz, as is appropriate, and yet a wider conflict has shaped up around that region. According to the Wall Street Journal, more than 2,800 drone and missile attacks have been launched by Iran at the United Arab Emirates (U.A.E.) since the beginning of hostilities: more than Iran has launched against Israel. In April the U.A.E. responded by attacking Iran’s Lavan Island which is one of four major terminals for their export of crude oil. This casts that Gulf monarchy as an active combatant in the war between Iran and the United States. In addition, French Mirage fighters and Chinese Wing Long drones have been tracked in public photos over Iran. Both of those are used by the United Arab Emirates. According to U.S. Air Force Lt. Gen. Dave Deptula U.A.E. possess unusually sophisticated air power capabilities for the region. They have a fleet of advanced F-16 jet fighters and precision strike, air defense, airborne surveillance, refueling, and logistics. Bottom line, Arab monarchies are scrambling to establish new relationships and arrangements.

On Wednesday May 13th, President and Commander in Chief Donald J. Trump and his government delegation along with several significant business leaders arrived in Beijing for negotiations with President and Chairman of the Central Military Commission Xi Jinping and his entourage. Most talks will likely have taken place on Thursday, the only full day of meetings and events. Geopolitical chess at its best taking place in real time right in front of us, though with a thick red curtain pulled across it. There are many issues that will be broached if not discussed encompassing trade items and controls, industrial and agricultural policies, drugs, and war. To be more particular, soybeans, Boeing airplanes, rare earths, fentanyl, export controls, and Iran.

This Blog has spoken much about trade by defining, describing, and detailing tariffs. Yet there are other trade controls that are available to individual countries like the U.S. and China. Since late 2025, China has halted all U.S. soybean purchases. I suppose one might call that an infinite tariff. In April of 2025, in retaliation for U.S. tariffs imposed earlier that same month, the Chinese government told the country’s domestic airlines to stop accepting deliveries of Boeing jets as a trade war between the world’s two largest economies escalated. And the list of trade items being restricted goes on.

Perhaps the most prominent and significant of the issues arising in the relationship between China and the U.S. is the status of Taiwan. Historical sources suggest Taiwan first came under the control of a Chinese empire in the 17th Century. It became a Japanese colony in 1895, after the Qing empire lost the first Sino-Japanese war. After Japan lost WWII, China took the island again with a nationalist government led by General Chiang Kai-shek holding power.

This lush island has had many names and occupiers. It was Shan Hai Jing (“Classic of Mountains and Seas”) around the 3rd century BCE. It was often called Dunghai (“Eastern Sea”) or Yueh emphasizing its southern location relative to China. In the 1590s, Portuguese explorer Fernão Mendes Pinto documented the island as Ilha Formosa (“Beautiful Island”); Formosa stuck as an international name. The Dutch called it Tayouan (from the indigenous Tainan area). The Spanish briefly occupied the northern coast and named it San Salvador. After defeating the Dutch and Spanish, the Qing Dynasty formally adopted Taiwan (臺灣) as the administrative name. Then at the end of WWII and in the aftermath of the Chinese Civil War, the ROC government under Chiang retreated to Taiwan in 1949. It took control and retained Taiwan as the official name. To this day what we call “Taiwan” is officially known as the Republic of China.

Why is Taiwan important? It is a microcosm of technological excellence that collectively holds a linchpin position in the world supply chain of the most advanced semiconductor chips. It is indispensable for the advancement of AI and irreplaceable to electronics manufacturers around the globe. Taiwan Semiconductor Manufacturing Co. (TSMC) tops the list of firms of importance within Taiwan. They fabricate 90+% of the world’s most advanced chips. That’s just the tip of the iceberg. Taiwan has foundries, packaging houses, substrate suppliers, material firms, equipment engineers, testing specialists, design-service providers and other process expertise. Taiwan is the Crown Jewels of electronics manufacturing and both China and the U.S. know it.

What do you think about other Gulf States engaging Iran? Do you have a sense of the importance of the negotiations that are taking place between the U.S. and China? Perhaps most importantly do you fully appreciate the importance of Taiwan? Let us know at taxingtariffs@microncorp.com and then we’ll see you next time on TAXING TARIFFS.

The Trade Relationship Between the US and China

Welcome back to TAXING TARIFFS! In this post we will start to detail the trade relations between the U.S. and the People’s Republic of China.

On Jan. 30, 2026, The Wall Street Journal published an Opinion Commentary article by the U.S. President titled “Donald J. Trump: My Tariffs Have Brought America Back.” In the article he extolled his imposition of tariffs on nearly all foreign countries last April. Trump went on to mention the deals that he has made with China, the U.K., the European Union, Japan, South Korea, Vietnam, Indonesia, the Philippines, and Malaysia. It is worthy of note that he began this list of deals with China and didn’t list or mention Canada and Mexico. It’s interesting that he would begin the list with China since Trump’s dominant player position in the series of post-tariff setting negotiations and deals came to an end when he faced China in this set of rounds. Whatever Trump’s motivation for listing China first it is certain that U.S. – China trade relations are important to both countries and to the rest of the world.

In 2024, the People’s Republic of China total trade in goods with the U.S. was $582.5 billion. This total trade was made up of $143.5 billion of U.S. exports to China, and $438.9 of U.S. imports from China. China is the fourth-largest U.S. export market and includes aircraft, agriculture, semiconductor chips and equipment, gas turbines, medical devices, various and sundry U.S. consumer goods, and many different production inputs.

Our tale of trade between China and the U.S. begins in 2018. That’s when Trump first introduced new Chinese tariffs in this latest set of tariff volleys. We’ll take 2017 as the baseline for our investigation of trade rates; that coincides with the beginning of Trump’s first term (Jan. 20, 2017). In 2017 the U.S.-China Two Way Average Tariffs, not accounting for tariff exemptions, were 2.7% and 8%. That is to say, the average U.S. tariff rate on goods from the China was about 2.7%, and China’s average tariff rate on U.S. goods was about 8%. This data comes from the Congressional Research Service and can be found at crsreports.congress.gov. Tariffs were below 10% on both sides of the China-U.S. trade relationship. Oh, how the magnitude of tariff rates has changed since then.

There are three pieces of legislation that Trump has used to impose tariffs on China, as well as other countries. Section 301 of the Trade Act of 1974 (19 U.S.C. sub-Section 214) addresses unfair trade barriers. Section 201 of the Trade Act of 1974 (19 U.S.C. sub-Section 2251) protects U.S. industry against import surges. And Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. sub-section 1862, as amended) considers the national security effects of U.S. imports and allows/requires for an investigation to precede decisions on tariffs. In 2018, using Section 232 of the Trade Expansion Act, then-President Trump imposed import tariffs of 25% on steel and 10% on aluminum for China and other countries. China retaliated by raising tariffs on aluminum waste scrap to 49%, and on pork, fruits, and nuts to 20%. The tit for tat had begun, and the volleys would only continue.

Also in 2018 the Office of the U.S. Trade Representative found “that the PCR engaged in forced technology transfer, cyber-enabled theft of U.S. intellectual property and trade secrets, discriminatory and non-market licensing practices, and state-funded strategic acquisitions of U.S. assets.” As a result the U.S. imposed tariffs from 7.5% to 25% on approximately $370 billion of Chinese goods imports. China came back with tariffs on $110 billion of U.S. trade. By 2023 the average tariff percentages between the U.S. and China rested briefly at 19% and 21% respectively. Both sides well above 10%.

Then in 2020 there seemed to be a pause in the rush to tariffs. The U.S. and China signed a “Phase One” trade deal. The deal addressed the U.S. trade deficit with China. And this is where relations changed from a back-and-forth imposition of tariffs to a purchasing deal. China agreed that in a two-year period starting in 2020 that it would purchase at least $200 billion of goods above a 2017 baseline. This deal included products from agriculture, energy, and manufacturing, as well as some services. By 2021 U.S. Census Bureau had determined that China had fallen short of its commitments by 60%.

Due in part to the failure of the purchasing deal, in May of 2024 USTR extended most 2018 tariffs and raised tariffs to 100% on some goods including electric vehicles, batteries, medical products, ship-to-shore cranes, semiconductors, solar cells, steel, and aluminum. Of most importance to electronics manufacturing, in December 2024, USTR initiated an investigation on China policies in mature-node chips and their effects on critical industries, and silicon carbide substrates and wafers used in chip production. Then came 2025, and what a year it was for tariffs, tariffs, and more threats of tariffs.

Well that’s all the space and time we have for this post of TAXING TARIFFS. How do you feel about U.S.-China trade relations? Are the back-and-forth tariff volleys making your head spin? Should tariffs be involved in our semiconductor industries? Answer those questions on taxingtariffs@microncorp.com and we’ll see you next time on TAXING TARIFFS.