The divorce between Donald Trump's United States and China will be painful. By banning Nvidia, a leader in artificial intelligence chips, from selling even unsophisticated microprocessors to Beijing, the US president caused new tremors in the financial markets on Wednesday, April 16. Nvidia's stock fell by 6.9%, dragging down US tech stocks and the Nasdaq index, which lost 3.07%. The financial markets are making the Trump-driven Chinese-American decoupling very costly. Meanwhile, Chinese President Xi Jinping, by resisting, is working to increase this cost for the United States.

Already, Trump had to reluctantly suspend the tariffs on electronic devices produced in China as they threatened to sink Apple, which manufactures most of its iPhones in the country, and US electronics more broadly. However, he remained inflexible on the rest of Chinese imports, which have been taxed at a rate of 145% since April 10, a level that Beijing has not exactly matched in its response, which came in the form of 125% tariffs imposed on April 11.

China has chosen to pull a series of levers, such as banning its airlines from receiving Boeing aircraft deliveries. Furious, Trump accused China of not honoring its contracts. More discreetly, Beijing has created a licensing system for exporting certain rare Earth metals, effectively suspending shipments of some of these strategic metals used to manufacture essential magnets in smartphones, medical imaging, electric vehicles and missiles.

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