President Trump is racing to respond to a major escalation of the U.S.-China trade war, with the American supply of critical technology hanging in the balance.

Trump administration officials announced plans this week to take a more active role in ensuring access to “rare earths” — minerals that are key components in several important technologies — in response to new Chinese export restrictions.

The new rules give China significant leverage in its trade war with the U.S. as both nations race to dominate the future of AI and the semiconductor chips essential to powering the technology.

The U.S. and China have butted heads over tech exports and defense-related technologies for decades, and Beijing could ease or issue exemptions to the new rules to bring the temperature back down.

But China’s latest actions, experts say, reflect an unprecedented willingness and ability to test the boundaries of its relationship with the U.S. at a dangerous time for the dynamic between the two nations.

“We're just playing with fire here,” said Edward Alden, senior fellow at the Center for Foreign Relations.

“We don't actually know what the potential consequences are. We may be able to keep this to a fairly small blaze, or it may really burn out of control with extraordinary consequences that are hard to forecast.”

Months of progress toward a U.S.-China trade pact skidded to a halt last week when the Chinese government announced new, wide-ranging restrictions on rare earth minerals and related products.

The restrictions require companies to seek licenses for products manufactured abroad that contain trace amounts of certain rare earth minerals from China or rely on Chinese rare earth mining technologies.

It also announced new export controls on five........

© The Hill