Think Tank Predicts Continued US Pause on Chinese Export Controls in 2026
The U.S.-China trade relationship will experience a relatively stable year in 2026 as both sides determine their next steps amid an export control stalemate, Eurasia Group analysts predicted this week.
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In its new report about the top geopolitical risks that it believes are most likely to play out this year, the think tank said both Washington and Beijing need “breathing room to address their strategic vulnerabilities.” At the top of that list is China’s susceptibility to U.S. export restrictions on advanced tech and the lack of U.S. access to non-Chinese critical mineral supply chains.
Both countries learned in 2025 that a trade and tariff war means a “lose-lose proposition,” the report said. “The leverage cuts both ways: China can paralyze American military and civilian industries by restricting rare earths; the United States can kneecap China’s development by restricting chips and jet engines.”
The Trump administration last year restricted certain exports of jet engines and other technologies to China (see 2506090033), and it later published a rule to extend Entity List license requirements to non-listed majority-owned affiliates of those entities. After U.S. President Donald Trump and Chinese President Xi Jinping met in South Korea, the Bureau of Industry and Security suspended the Affiliates Rule for one year, and Beijing also agreed to suspend sweeping export restrictions over certain foreign-made items that contain Chinese rare earths (see 2510310020).
The Eurasia Group predicted that the “continued implementation” of that Korea meeting “will bring tangible benefits that backstop the truce.” Beijing will “loosen restrictions on critical mineral flows,” while the U.S. will continue to “pause key export controls” and may even ramp up certain exports to China.
“Purchases of Boeing planes, US energy exports, and Chinese investment in approved US sectors may not be far behind,” the think tank said.
It also warned that “none of this means smooth sailing,” adding that “flare-ups over tech restrictions and critical mineral flows” are still likely.
“But tensions will be resolved at the political direction of both leaders, neither of whom wants prolonged escalation. Trump’s April visit to China, Xi’s likely trip to the United States later in the year, and sideline meetings at the G20 and APEC summits will keep both sides invested in stability,” the report said. “The underlying strategic competition and the broader strategic decoupling continue, but 2026 won’t be the year the most important geopolitical relationship in the world falls apart.”
In addition, the report touched on the Trump administration’s sanctions policy, including how it will approach Venezuela after capturing Nicolas Maduro earlier this month (see 2601050056). The group said Venezuela's new government, “desperate to revive its shattered oil sector,” might offer Trump preferential deals for U.S. oil companies in exchange for sanctions relief.
“Trump will be receptive as long as he can claim a win,” the report said. “Market access, security commitments, diplomatic favor -- more opportunity appears to be on the table for foreign governments willing to pay the price.”