US-China trade/tech war escalates with calibrated retaliation ahead of Xi summit

China retaliated on August 5 with drone export controls, sanctions on 7 US entities, and a national security probe into imported office equipment. US finalized 15% polysilicon tariff. Rare earth export controls suspended for one year. Summit diplomacy ongoing with deep trust deficit, underscored by Pentagon policy chief Colby unable to secure Beijing visit due to Taiwan arms sales and his hawkish past; Hegseth's agnostic stance and Chinese reluctance to host a lecturer signal stalled military-to-military dialogue, raising miscalculation risk.