Trade Wars and Tech Wars: How to Play the U.S.-China Standoff

The U.S.-China trade landscape in 2025 is a minefield of opportunities and pitfalls, shaped by tariff truces, rare earth power plays, and the AI revolution. As trade talks teeter on deadlines like the August 12 tariff suspension, investors must navigate this geopolitical chessboard with precision. Let's break down where to bet—and where to flee.

The Rare Earth Gold Rush: MP Materials is the Play

China's recent agreement to ease rare earth exports to the U.S. is a game-changer. While tariffs on Chinese imports remain at 34%, Beijing's willingness to supply critical materials like neodymium (used in magnets for EV motors) and dysprosium (for semiconductors) opens a window for U.S. producers like MP Materials (MP).

The company controls the only rare earth mine in the U.S., and its expansion plans—backed by $500M in funding—position it to capture 20% of global demand by 2026. With China's export quotas and U.S. domestic manufacturing incentives under the CHIPS Act, MP is a buy.

AI Chips: NVIDIA's Monopoly and Meta's Fuel

The AI boom isn't slowing. Meta's hiring spree of OpenAI talent and its $14.3B investment in Scale AI are stoking demand for NVIDIA's (NVDA) GPUs, which power 90% of large-scale AI training. Even as Samsung stumbles on HBM chip certifications, NVIDIA's H100 and Grace Hopper chips remain irreplaceable.

Investors should also watch AMD (AMD), which closed the gap with its MI300 chip—a cheaper alternative to NVIDIA's GPUs. But for now, NVIDIA is the king of this sector.

The Caution Zone: Semiconductors and Auto

Samsung's 56% profit plunge highlights the risks. U.S. export controls on advanced chips to China have idled Samsung's foundries, while delays in supplying Nvidia's HBM3E chips cost billions. This isn't just Samsung's problem—it's a sector-wide issue.

Auto stocks like Ford (F) and General Motors (GM) are also vulnerable. Section 232 tariffs on steel/aluminum (up to 50%) and potential U.S. levies on Korean-made EVs could spike costs. Avoid these until trade tensions cool.

The Bottom Line: Bet on Tech Sovereignty, Hedge with Metals

The U.S.-China standoff is a marathon, not a sprint. Here's the plan:
1. Buy MP Materials to capitalize on rare earth scarcity and U.S. manufacturing.
2. Hold NVIDIA through tariff noise—its GPU dominance is unshaken.
3. Avoid auto and traditional semiconductors until trade terms solidify.

As Jim always says: “Don't fight the tape.” The tape is screaming for tech independence. Now's the time to double down on AI and rare earths while steering clear of industries stuck in the crossfire.

Action Items:
- Add MP Materials to your portfolio.
- Use dips below $600 to buy NVIDIA.
- Sell auto stocks if Section 232 tariffs on EVs are confirmed.

Stay aggressive, stay focused—and never underestimate the power of a good trade war!