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China defends rare earth export curbs as ‘legitimate,' hits back at U.S. tariffs ahead of possible Trump-Xi meeting

1. China defends new export controls on rare earths amid U.S. tariffs. 2. Controls aim to strengthen China's export system and regional stability. 3. Measures impact rare earths and related technologies, affecting supply chains. 4. China claims limited supply chain impact due to the new measures. 5. U.S.-China tensions may escalate ahead of potential high-level meetings.

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FAQ

Why Bearish?

The introduction of export controls could signal growing tensions, affecting FXI's performance. Previous instances of trade tensions led to stock market volatility spurred by investor uncertainty.

How important is it?

The article discusses significant export controls affecting a critical industry, directly impacting FXI holdings in relevant sectors. Geopolitical developments influence investor sentiment towards Chinese equities.

Why Short Term?

Immediate reactions to geopolitical tensions often impact stock prices quickly, as seen during the 2018 trade war escalation. However, if measures stabilize later, effects may diminish.

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