Rare earth minerals are China’s trump card.
Trade Hardball Coming Up
The Wall Street Journal reports China’s New Trade Negotiator Is Ready to Play Hardball
In Geneva in mid-May, Vice Premier He Lifeng [pronounced “huh”] extracted a 90-day trade truce from a Trump team that had until then declined to pause a tariff blitz on China the way it had for other countries. The deal calmed the nerves of investors and markets around the world.
Now, after both sides have complained that the other wasn’t upholding the terms of the deal, that trade truce is teetering, once again jolting global investors and businesses.
At the center of the storm is He, Xi’s economic gatekeeper, who has made clear China’s strategy in this trade war is nothing like the approach it had in Trump’s first term.
During the Geneva talks, He had removed a final sticking point by agreeing to U.S. demands that China resume rare-earth exports. Yet since then He has dug in his heels, slow-walking approvals of licenses to export the minerals critical in the manufacturing of modern cars and other products.
Beijing blames the U.S. for the breakdown, saying a warning against the use of certain artificial-intelligence chips from China’s Huawei Technologies was a renewal of U.S. aggression, and complained to Washington that it undermined the trade deal. It also took offense at the U.S. plan to aggressively revoke visas for Chinese students.
Strategically, Xi feels empowered to harden his position from Trump’s first term. The arsenal of trade tools China has built under He’s leadership, including export controls of critical materials used to make chips, cars and F-35 jets, gives it the ability to cause the U.S. real pain.
China has also narrowed the technological gap with the West, racing ahead in many strategic sectors such as renewable-energy products, robotics and artificial intelligence. Such progress makes the country less vulnerable to U.S. sanctions than in the past.
Under He’s guidance, Beijing in early April took aim at the technology and high-end manufacturing sectors in the U.S., requiring export licenses for certain rare-earth magnets used in products such as semiconductors and electric cars. It wasn’t an outright ban but quickly caused the flow of such magnets to the U.S. to dry up as Chinese suppliers had to seek government approval for each overseas shipment.
Such export controls have become a powerful lever for Beijing, and the measure was among the most worrisome aspects of the trade conflict for Western automakers. During the Geneva talks, He agreed to resume allowing such exports during the 90 days but made no promise beyond that, the people said, allowing China to retain leverage over Washington in future trade negotiations.
Trade War Ironies
- Trump moans about the trade deficit with China but will not sell China the technology it is willing to buy. For example, the US has export controls on Nvdia’s advanced microchips, and export controls on AI as well.
- Second, Trump is threatening to expel Chinese students in particular, and foreign students in general, all of whom pay full price to US universities and spend additional money in the US while here.
The US has a goods deficit but a services surplus with most of the world, and Trump’s policies are hurting the services surplus.
Related Posts
On April 4, 2025, I commented China Strikes Back With 34 Percent Tariffs, Stocks Plunge Second Day
China restricts 7 more rare earths, something I have warned about many times.
China Panics
Trump says China Panicked
CHINA PLAYED IT WRONG, THEY PANICKED – THE ONE THING THEY CANNOT AFFORD TO DO!
Actually, Trump will be the one to panic if China halts all rare earth exports, not just to the US.
April 13, 2025: China Halts Rare Earth Exports Desperately Needed by the US
I have been warning about this for years. It’s now happening.
If Trump ups tariffs on China again, China will reinstate export controls on rare earths.
Also see Harvard Take Two, Who Should Be Responsible for Foreign Student Visas?
I was asked “Don’t you think there should be any checks to who we allow into the US?“
If you get the idea that no one will win this trade war, then you are thinking clearly.
Trump should have thought ahead at least a little bit before starting this trade war.
Unfortunately for all Americans trump is a fool without basic mathematical skills or the ability to develop a strategy beyond creating chaos.
The rare earth problem is far larger than most people think and our weapons systems depend on China’s rare earth exports. Shortages are already starting and China is laughing at trump and his minions…
TACO Orange glow makes me do estrange things….
Of course, there should be checks on who enters this country for either student visas or anything of a permanent nature….
There were and are checks
Also, the rare earth embargo is now permanent too. Racists will have no choice but to relocate all their industries what’s left of it to China to get access to rare earth even when tariff are cancelled and Trump kneels before the Chinese people to beg for forgiveness.
“Rare earth minerals are China’s trump card.”
All the more reason to eliminate this advantage China maintains over us.
It won’t be easy and will take time, but it’s HIGH TIME to eliminate our dependence on Chinese mined REM.
Sure it will take a few years, maybe a decade, to get that rolling here in the USA. In the meantime, all important industry in the US will need to shut down while they wait. But a price well worth paying to, to, um, do something!
Trump understand now ” Its not easy to win “.
The CCP’s days are numbered. The Chinese citizens are fed up with them.
Yea they are totally sick of increasing living standards, education and health services.
They want to live in a country in social decline instead
China and America. One censors social media, coerces medical treatment and doesn’t allow democracy in any meaningful way, with the security state being the true ruler. The other one is China.
big lol at the insinuation here that China doesn’t censor social media and that it allows democracy in a meaningful way.
I mean yeah I get what you’re trying to nail here but you gotta put the sledgehammer away first.
You are worse than some Chicom troll like a “50 Cent Party” type
Since when do Chinese citizens decide who runs the country? Go easy on the propaganda Kool Aid.
Damn, 11 down votes. Being pro-America seems to be in short supply here. Everyone seems to think China is way better than us, unfortunately for the rest of us pro-Americans, they’re not moving to China, in part, because the CCP won’t let them. But our last administration welcomed more CCP card carrying visa holders & illegals than we could possibly imagined ensuring all of the CCP’s IP theft continues.
Being pro-America doesn’t mean you have to stupidly believe false things about other nations. You heard it here first!
It is just too obvious that we and China need one another in Trade. However, the SUPPLIER WILL ALWAYS HAVE the UPPER HAND. Esp. when that supplier has “SOLE” attached to the term. Trump is an incompetent Man.
In any relationship (love, business, friendship etc) the one with the upper hand is the one who needs the other the least.
The problem with that is no one actually needs the other (in any of those relationships). It is recognizing that having the relationship is more beneficial than not having the relationship. Trying to use the “upper hand” can often cause a detrimental reaction in the relationship, causing the other party to question the benefit. Which increases uncertainty and diminishes the benefit for both. Imagine a relationship in which both parties benefit and seek to increase that benefit for both.
Right. So he’ll let China crumble?
Trump’s China rant can’t hide his trade war retreat
https://asiatimes.com/2025/06/trumps-china-rant-cant-hide-his-trade-war-retreat/#
Trump is now asking all countries to present their “best offer” on trade TOMORROW . I can’t imagine anyone responding with just 24 hours notice.
Trade agreements involve hundreds of participants from each side providing input and take years to hash out the details.
Either that or pay yuge tariffs.
Lol! Too bad Taco Trump is mostly bluffing with them. He chickens out within a couple of days without ever achieving much.
Not true! ‘Tariffs’ displaced ‘AI’ in the number of keyword searches. Winning!
He continues to act as if America has the upper hand. ANYTHING he DOES to affect a supplier which leads to shortages will affect US as Citizens. He is an idiota….in any language.
He’s starting to sound like a child having heated discussions with his imaginary friends.
Auction with no bids.
Even countries that don’t particularly like China are seeing it as saner option.
Trump represents the disaster that the average American voter has become.
I hope we continue to reduce trade with China, that would be the best outcome from this trade war in my opinion. Over the past three decades, U.S. trade with China has not only accelerated Beijing’s economic rise but also has enabled the modernization of its military.
1. Trade Surpluses Fund Military Expansion
2. Technology Transfers and Dual-Use Goods
3. Supply Chain Dependencies and Strategic Vulnerabilities
4. Intellectual Property Theft and Military Cloning
5. Investment & Capital Flows
U.S. capital markets have helped fund Chinese companies tied to military development, often without investors’ knowledge. Many of these firms are listed on major indexes. These companies supply the PLA with surveillance tech, missile systems, and space capabilities.
“The capitalists will sell us the rope with which we will hang them.”
Quote attributed to Vladimir Lenin.
Nonsense. More trade is a win-win for both sides and reduces the tensions that lead to war. When trade stops, wars begin.
If after reading what I wrote you think that’s a win-win? Here’s some information about their plans, I don’t think they are pursuing a win-win situation.
———————————————-
“Unrestricted Warfare” is a 1999 military treatise written by two senior colonels in China’s People’s Liberation Army, Qiao Liang and Wang Xiangsui. While not an official Chinese government doctrine, it reflects strategic thinking that has influenced modern Chinese military and geopolitical approaches — especially their concept of achieving global dominance without conventional warfare. China should pursue asymmetric strategies to defeat stronger opponents — especially the U.S. — not through tanks and missiles, but through non-military means like economic manipulation, cyberwarfare, legal systems, media influence, and cultural subversion.
While all great powers are very keen to remain great powers China seems much less concerned about absolute power and military dominance. The history of the US is about expansion, conquest and domination. The US needs to adjust it’s outlook to rebuilding the soul of the nation.
China still has a soul but recent Chinese history is of being dominated and so there is a determination that will not happen again.
OMG! Please!!!!
Great post! #1 of the month this far. Bravo!
If the American public really understood how beholden we are to China, how much IP theft they’ve done, and how much social & cultural psyops they’ve done, we’d all collective S our pants, except Turtle & probably AOC.
America must decouple from China in all sorts of strategic goods. It’s that simple. There’s no alternative.
China didn’t steal American IP. They just told American CEOs that if they wanted access to the Chinese market and to build factories in China, they had to hand over their IP. Those CEOs gladly did it because it increased their quarterly share prices on Wall Street and got them handsome bonuses.
You sound just like that banned “Jay” person – complete with China paranoia.
If you start using bold type, we’ll know for sure.
Thank you for your comment. I’ve compiled a list of a few books for anyone interested in what’s really going on. So many people are unaware of the real threat.
————————————-
1. The Hundred-Year Marathon by Michael Pillsbury
A must-read from a former insider at the Pentagon.
• Argues that China has a long-term plan to replace the U.S. as the global superpower.
• Written by a China expert who once advocated for engagement but changed his stance after decades of observation.
————————————-
2. Stealth War: How China Took Over While America’s Elite Slept by Robert Spalding
Written by a retired U.S. Air Force brigadier general.
• Exposes China’s infiltration into key U.S. institutions — tech, media, finance, and politics.
• Discusses the CCP’s use of non-military warfare like economic leverage and propaganda.
————————————-
3. Red-Handed: How American Elites Get Rich Helping China Win by Peter Schweizer
Investigative journalism meets political corruption.
• Reveals deep ties between China and influential U.S. figures across politics, academia, and business.
————————————-
4. The China Dream by Liu Mingfu
Written by a top CCP military theorist.
• Outlines China’s aspiration to become the world’s leading power.
• Offers chilling insight into how the CCP sees the U.S. as a declining empire to be replaced.
————————————-
5. Spy Schools by Daniel Golden
Focuses on academic espionage and Chinese student networks.
• Shows how the CCP uses U.S. universities to steal intellectual property and monitor Chinese nationals.
Sounds like old Cold War stuff.
Replace “China” with “Russia”, and you’re back in the late 50’s.
Yep. I read all the nonsense you wrote.
I agree PAPA. War would lead to complete chaos and sometimes I wonder (or suspect) that that is the goal.
Part of God’s plan… the Antichrist has ascended to the presidency, and Armageddon can begin.
I’m looking forward to it. All those people going to heaven will leave behind all kinds of great stuff.
LOL! Unfortunately the one’s with the great stuff won’t be the one’s ascending.
We will be stuck with a bunch of politicians and hedge fund managers here on earth?
US tariffs were dropping before the US entered WWI and WWII. US tariffs were low when the the US started the Korean, Vietnam, Gulf, and Afghanistan Wars. I’m not seeing the correlation.
https://en.m.wikipedia.org/wiki/File:Average_Tariff_Rates_in_USA_%281821-2016%29.png
China has already in the last eight years cut their reliance on exporting to the USA by one third. We were over 19% of their exports now we are less than 13%. They’ve been planning for this type of event for a decade, while Trump makes up his daily plans on a daily basis. In my view the edge goes to eight years of planning over extemporaneous, emotionally driven ego based outlashing. But hey, the disagreement makes for excellent debate.
To be clear, in my view the USA trying to cripple China through trade? It’s NOT going to work. Just check all the vehicles driving around SEA, that’s where all China’s big exports are growing the most. And Brazilian soy,.
You are correct. We are screwed with a Nutcase (too old to think?) Pres.
It’s reduced because instead of shipping directly to the US they are shipping through an intermediate country (Vietnam etc) in order to bypass being from China.
There are subtle ways to accomplish the goal.
Think about Pharma.
We cannot instantly source base materials and the Factories to pump out anything in short order.
This entire thing is not gonna work out well unless Trump begins to show some respect for REALITY.
I find it funny when anyone overplays a weak hand – like Zelenskyy re Russia or Trump v China. It is serious business, though. Trump wildly overestimates his own value and underestimates the complexity of most issues. Sad
The dumbest guy in the room is always the one who thinks he’s the smartest. Nix that, the dumbest guy is the one who believes the other guy is the smartest and votes for him.
Education services surplus: I prided myself for decades on teaching our ways of business and law, hence culture, to college students from everywhere. (In this era, now I have to plaster disclaimers on half of it, based on the, shall we call it, experiments being introduced from the top). I recall on 9/11 I had a huge diaspora of Middle East students. That changed, alright, though there were narrower remaining groups of Iraqi (mostly Christian, Chaldean) and Afghan students after that, and a dwindling number of Gulf Arabs, to this day. I recall also Brazilians and Turks across those years, who have basically disappeared. In maybe 2012 there was a big surge of Chinese (PRC) students, dropping off into the pandemic, and since, to essentially zero now. I had a few from Taiwan, but have seen none lately. I have always had plenty of Spanish surnames (here in the southwest USA), but I am very curious on that, what Fall will bring. I saw us as exporting our values and ways, but there have been some decisions, shall we say, perhaps redirecting that.
I agree that Christianity is not the only thing we should be proselytizing on the rest of the world.
The grand irony between the US and China and the current predicament is that both are learning a harsh yet repeatable lesson: central planning doesn’t work. China’s central planning policies were working fine until the US changed the rules. The US economy was doing fine until central planner TACO Trump decided to change the status quo. Yes there may be the illusion that central planning is working in the short term but long term it fails. It fails because markets change, labor demographics change, technology changes, and the world keeps moving on and there is no central planner that can foresee or control it all. NONE.
Show me a politician with central planning strategy and I will guarantee it will fail eventually. So the negotiations will go on and some central planning outcome will fail from it.
Every country on earth does central planning to some extent. That’s literally the function of government.
The difference is here in the US is we have way more checks & balances. Your hated enemy, TACO, is being reminded of this frequently as he gets the occasional win.
Xi doesn’t face anywhere near the same limitations.
MAGA!