Tech, Trade, and Tensions: Nvidia’s China Chip Sales Tied to Rare Earth Talks Amid U.S. Policy Shift

16th July 2025

The U.S. Commerce Department has linked Nvidia’s plans to resume sales of its H20 AI chips to China with broader trade negotiations over rare earth minerals. Commerce Secretary Howard Lutnick said the chip sales are part of a deal to secure rare earth supplies for U.S. manufacturers. The move marks a reversal of earlier export restrictions aimed at curbing China's access to advanced AI technology, prompting bipartisan criticism in Washington. Despite limited performance compared to global versions, the H20 chips remain highly sought after in China due to their compatibility with Nvidia’s software. The decision comes as Nvidia looks to protect its market share in China, which accounts for 13% of its revenue, while U.S.-China tech tensions continue to escalate. All in today’s Read It and Eat !

Major Headlines 

• Nvidia’s AI Chip Sales to China Tied to Rare Earth Trade Talks, Says U.S.

In a surprising development, the U.S. Commerce Department has linked Nvidia’s plan to resume sales of its H20 AI chips to China with ongoing negotiations around rare earth minerals. Commerce Secretary Howard Lutnick confirmed the connection on Tuesday, just days after Nvidia CEO Jensen Huang met with former President Donald Trump. "We put that in the trade deal with the magnets," Lutnick told Reuters, alluding to a broader agreement to resume U.S. access to Chinese rare earths. While details remain limited, the timing of Nvidia’s license application to resume chip exports and the government’s apparent willingness to approve it has raised eyebrows.

Nvidia, whose H20 graphics processing unit had previously been caught in U.S. export restrictions aimed at limiting China's access to cutting-edge AI tech, is now looking to get those sales back on track. The U.S. government, according to Nvidia, has given assurances that licenses for the H20 chips will be granted soon. The move reverses an earlier ban from April, which was part of broader national security concerns widely supported across party lines. That reversal, however, has triggered pushback from lawmakers. Democratic Representative Raja Krishnamoorthi called it “dangerously inconsistent” with the Biden administration’s previous stance, while Republican John Moolenaar announced plans to seek clarification from the Commerce Department.

Despite the chip’s reduced performance compared to its global versions due to existing restrictions the H20 still runs on Nvidia’s widely-used software stack, making it a highly attractive option in China. Huang has warned that without access to Chinese developers, Nvidia risks losing ground to local players like Huawei, which are rapidly scaling up domestic alternatives. Industry experts point out that the real impact of this policy shift will depend on how many H20 chips the U.S. actually allows into China. "If China is able to get a million H20 chips, it could significantly narrow, if not overtake, the U.S. lead in AI," said Divyansh Kaushik of Beacon Global Strategies.

The stakes are high: China accounted for roughly $17 billion or 13% of Nvidia’s total revenue last fiscal year. Major tech firms like ByteDance and Tencent are reportedly lining up to buy H20 chips, though Nvidia has declined to comment on the specifics of its approved buyer list. Meanwhile, China’s foreign ministry has pushed back against what it calls the "weaponization" of trade and tech policy. At the same time, Beijing has halted exports of rare earths, a critical resource for everything from smartphones to EVs, following a trade spat with Trump. With tensions still simmering and rare earth access at the heart of it all, Nvidia’s role in this tech-trade balancing act is being closely watched on both sides of the Pacific. Reuters

•  Apple Strikes $500M Rare Earth Magnet Deal with MP to Strengthen U.S. Supply Chain

Apple is making a bold move to shore up its supply chain for rare earth magnets, announcing a $500 million deal with MP Materials that’s both a strategic win for the tech giant and a major milestone for the U.S. mining sector. With rare earths playing a critical role in the production of iPhones, MacBooks, and other Apple products, the agreement ensures a stable, China-free source of these vital materials. The deal also sent MP’s shares soaring up nearly 20% and comes on the heels of a multibillion-dollar agreement between MP and the U.S. Department of Defense, which will soon become MP’s largest shareholder.

For Apple, this deal is about more than just raw materials. It’s about risk management in a global environment where geopolitical tensions, particularly with China, the dominant supplier of rare earths, have made tech companies increasingly nervous. China recently tightened export restrictions on rare earths, amplifying the urgency for U.S. firms to find reliable alternatives. According to analysts, Apple’s investment now will pay off in resilience later. “We’re in an era where executives are willing to pay a significant premium for a reliable supply chain,” said Gracelin Baskaran of the Center for Strategic and International Studies. “They don’t want stoppage.”

As part of the agreement, Apple will prepay MP $200 million to secure magnet supplies beginning in 2027. While the specific volumes and duration of the deal weren’t disclosed, MP said the magnets will be made from recycled materials, in line with Apple’s long-standing push to reduce its reliance on mining. Production will take place at MP’s Fort Worth, Texas, facility, using rare earths processed and recycled at its Mountain Pass mine in California. CEO Tim Cook emphasized the importance of the partnership, noting that it helps bolster domestic access to essential components used in advanced technology.

This collaboration also plays well politically for Apple, which has faced criticism in the past for its overseas manufacturing. Though it's unlikely Apple will ever manufacture iPhones entirely in the U.S. due to labor costs and supply chain complexities, sourcing key materials domestically is a step in the right direction. Bob O’Donnell, president of TECHnalysis Research, said the move “makes complete sense” given the volume of magnets Apple needs across its devices. With additional supply deals in place with GM and Germany’s Vacuumschmelze, MP is emerging as a critical player in the broader push to re-shore America’s rare earth supply chain. Financial Times

•  Trump Steps In to Revive Stalled Crypto Legislation During ‘Crypto Week’ 

U.S. President Donald Trump stepped in on Tuesday to resolve a key impasse among Republican lawmakers that had threatened to derail a slate of long-anticipated cryptocurrency bills. Earlier in the day, a failed procedural vote in the House of Representatives cast doubt over the legislative agenda and sent shares of major crypto firms like Coinbase and Circle Internet lower. But by Tuesday evening, Trump announced via his social media platform that he had met with 11 of the 12 Republican members needed to move the vote forward. “After a short discussion, they have all agreed to vote tomorrow morning in favor of the Rule,” he said, signaling a renewed push to pass the crypto-focused measures.

House Republicans had dubbed this week “Crypto Week,” with plans to advance several pieces of legislation aimed at providing regulatory clarity and boosting legitimacy for the digital assets industry. Chief among them is a bill that would establish a formal framework for stablecoins digital currencies typically pegged to the U.S. dollar that are used to facilitate fast, stable transactions in the crypto ecosystem. Another bill up for debate seeks to define the legal distinction between crypto tokens as commodities or securities, a move seen as vital for both investor protection and market transparency.

The legislative process briefly stalled after some conservative Republicans joined Democrats in opposing how the bills were being packaged, effectively blocking the House from moving forward. The internal dispute reflected broader divisions within Congress about how digital assets should be regulated. Despite the setback, House Speaker Mike Johnson expressed optimism, saying talks would continue and that he expected another vote to be held shortly. Meanwhile, markets stabilized slightly as news of Trump’s personal involvement spread.

In addition to stablecoin and token classification bills, the House is also considering legislation that would prohibit the creation of a U.S. central bank digital currency (CBDC). Supporters of the measure argue that such a currency could give the federal government excessive control over individual financial transactions. The proposal has yet to gain traction in the Senate, and the Federal Reserve has indicated little interest in developing a CBDC. Still, if passed, this legislative package would represent a significant milestone for the crypto industry, which has long sought clear rules and recognition from Washington. Bloomberg 

• Stellantis Pumps the Brakes on Hydrogen Vehicle Plans Amid Market Realities

Stellantis has officially hit pause on its hydrogen fuel cell ambitions, announcing it will discontinue its hydrogen vehicle programme and halt plans to launch a new line of hydrogen-powered vans this year. The decision comes as the automaker cites a lack of progress in the hydrogen market and no clear signs of economic sustainability in the near future.

According to Jean-Philippe Imparato, Stellantis' Chief Operating Officer for Enlarged Europe, the hydrogen space remains a niche with too many obstacles: limited refuelling infrastructure, high capital costs, and insufficient incentives for buyers. “We have to make clear and responsible choices,” Imparato said, emphasizing the company's commitment to scaling up electric and hybrid vehicle offerings instead areas where consumer demand and infrastructure are more mature.

Stellantis had originally planned to begin production of its new Pro One hydrogen vans this summer at sites in France and Poland. However, with hydrogen adoption for light commercial vehicles now pushed beyond 2030, the company is shifting gears. While the decision marks a significant strategic pivot, Stellantis has confirmed that there will be no job losses at its production plants.

All R&D resources previously allocated to hydrogen projects will now be redirected to other technologies within the company’s growing electrification roadmap. As the automotive industry continues navigating the transition to greener transport, Stellantis' move underscores a broader industry trend: electric and hybrid vehicles are still leading the charge. Reuters 

Minor Headlines 

• Nvidia’s Huang Praises Chinese AI Models as ‘World-Class Competitors’. Finance.Yahoo

• ASML Pulls European Markets Down Amid Fresh Tariff Concerns. Reuters 

• UK Treasury Chief to Cut Financial Red Tape in Push for Greater Investment. CityAM 

• UBS Names Industry Veteran Toriyama as New Head of Global Banking in Japan. Reuters 

• Jamie Dimon Issues Caution to Trump Over Interference with the Federal Reserve. Financial Times 

• Canada’s Aura Minerals Eyes Over $196 Million in Planned U.S. IPO. Finance. Yahoo

• HMRC Unable to Confirm Number of Billionaires Residing in the UK. CityAM 

• Rachel Reeves to Criticize Business Regulation as ‘A Boot on the Neck’ in Mansion House Address. CityAM 

Gen Z Word of the Day 

Sip Tea

Sip tea is an alternative to "spilling the tea," meaning you're sitting back and listening to the gossip rather than partaking in it.