President Donald Trump expressed shock at China’s sweeping export controls on rare earths, accusing Beijing of “becoming very hostile.”
Over the weekend, Trump announced plans to restore tariffs on China to triple-digit levels in response to the new controls, prompting Beijing to vow “corresponding measures.” The developments rattled markets and renewed fears of a full-blown trade war reminiscent of earlier tariff escalations.
Beijing’s commerce ministry maintained that the US cannot seek dialogue while simultaneously threatening new sanctions, while experts in China said Washington’s recent restrictions were the true trigger behind the latest round of hostilities.
From easing to escalation
US-China relations appeared to improve briefly during trade talks in Madrid in September, followed by a phone call between Xi and Trump. However, Washington soon expanded its export restrictions, adding thousands of Chinese entities to its control list, a move Beijing called “malicious.”
“After taking a bite at China, the US now pretends to be innocent and even tries to play the victim,” said Jin Canrong, professor of international relations at Renmin University. Beijing, he said, merely responded to a pattern of “petty manoeuvres.”
Deja Vu
Analysts compared the situation to the downward spiral of May 2025, when both sides nearly entered a trade embargo. “We’re at the edge of an abyss again,” said Paul Triolo, a China-tech expert at Albright Stonebridge. “The stakes are even higher now.”
Trump’s earlier bans on Chinese AI chip exports and threats to revoke student visas had already strained relations. Beijing’s response this time tightening rare earth controls is seen as “logical and proportional,” experts said.
China’s rare earth leverage
China dominates global rare earth production and processing. The new rules expand the number of controlled minerals and restrict export technologies, mirroring US tactics like the “Foreign Direct Product Rule.”
The curbs have already caused shortages in global manufacturing, affecting sectors from automotive to defense and AI chip production. Despite reassurances that the controls are not bans, industries worldwide remain on edge.
“The ball Is in Trump’s court”
Beijing says the upcoming Xi-Trump meeting in South Korea remains uncertain. “It’s up to the US to take concrete actions,” said Wu Xinbo of Fudan University. “China won’t sacrifice its interests just to meet.”
Trump, however, appeared to soften his tone Sunday, writing on Truth Social: “The US would like to help China, not hurt it. Don’t worry about China, it will be all fine!”
Experts say both nations are playing high-stakes diplomacy but China, with its rare earth dominance, may hold the stronger hand in the short term.
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