"US-China Export Regulations... Attention Needed on Industries Benefiting from Reflex Gains"

An analysis has emerged highlighting the need for attention to industries expected to benefit from the trade friction between the United States and China.

On the 18th, Mirae Asset Securities explained in its report titled "Strengthening Export Regulations and Reflexive Benefits" that "attention is needed on U.S. rare earth production companies and China's semiconductor industry."

Seonggeun Kim, a researcher at Mirae Asset Securities, stated, "Although there have been no further tariff increases since China raised the tariff rate on U.S. imports to 125%, China appears to be controlling key resources," adding, "China temporarily banned exports of seven key heavy rare earth materials."

He explained, "From now on, Chinese government approval will be required for exports, and exports are scheduled to be restricted until a permit system is established," and added, "The U.S. depends on imports for 80% of the rare earths it needs, and China accounts for 70% of global production, indicating a high dependence on China."

Meanwhile, the U.S. is strengthening restrictions on AI chip exports. He said, "Although China has shown significant achievements in AI models, such as the recent DeepSeek announcement, there is a 5 to 10-year gap in semiconductor technology compared to the U.S.," and added, "On the 15th, the U.S. administration restricted the sale of Nvidia's China-market-specific chip H20 and chips with equivalent performance." He further explained, "Exports of AMD's MI308 product line and Intel's Gaudi series will be blocked without permission."

While such measures are causing volatility in the stock market, Kim's analysis suggests there are sectors expected to gain reflexive benefits. He said, "The sector expected to benefit from China's rare earth export restrictions is the U.S. rare earth value chain," explaining, "Starting in 2024, the U.S. is intensifying its domestic rare earth production policy, reducing import dependence from 100% in 2020 to the current 80%."

He emphasized, "With the strengthening of AI chip export regulations, China is expected to focus more on developing its own AI chips," and added, "China has been expanding support for the semiconductor industry, and such efforts are likely to be further strengthened in the future."