China will need U.S. to work out a deal that allows them to grow, says former Senator Gregg

US-China Trade Relations - The US President's comments on China are impacting the market, with concerns about escalating hostility [1] - China, with a population exceeding the US by 1 billion, may not be overly threatened by US tariffs [2][14] - Tariffs are viewed as a sales tax on the American people, potentially not significantly affecting Chinese leadership [2][6] - China needs trade to maintain stability and prevent job losses, requiring a deal that allows for continued economic growth [3] - Both the US and China depend on each other's economies, with the US needing China's rare earth elements and China needing US markets and technology [8] Taiwan Semiconductor Risk - The real risk is not tariffs on goods but the potential disruption related to Taiwan [9] - Taiwan Semiconductor controls 97-98% of global semiconductor production, meaning any embargo or blockade would shut down global technology [10] - China's leader views reintegrating Taiwan as a key foreign policy initiative and legacy goal, similar to Hong Kong [12][13] - A military solution regarding Taiwan is not viable due to China's large population and competitive technology, necessitating a carefully managed approach [14] - Taiwan Semiconductor's refusal to move its technology offshore is regrettable, as it remains vulnerable to Chinese integration [15] Rare Earth Element Risk - 90% or more of rare earth elements, crucial for modern technology, come from China, posing a significant risk [11] - A Chinese embargo or physical threat to Taiwan would have a huge international impact and could lead to a worldwide economic crisis [11]