Trump’s China Strategy: Targeting Rare Earths for Economic Impact
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US-China Trade Tensions escalate with Rare Earth Export controls
The Trump administration insists it holds the upper hand as trade friction with Beijing has reignited over its sweeping rare-earths export controls.
While President Donald Trump’s initial response was to announce an additional 100% tariff and software restrictions on China, which controls more than 90% of the world’s processed rare earths and rare earth magnets, he previously has alluded to harsher measures that could come into play.
“But the U.S. has Monopoly positions also, much stronger and more far reaching than China’s,” he warned in a truth Social post before his tariff move.”I have just not chosen to use them, there was never a reason for me to do so – UNTIL NOW!”
Trump has sence toned down his rhetoric and even acknowledged that his planned tariffs are not enduring, while Wall Street has dismissed his threats as an attempt to gain leverage in negotiations and another opportunity for the “TACO” trade.
At the same time, the White house has said a planned meeting between Trump and Chinese President Xi Jinping is still going to happen at month’s end on the sidelines of a regional economic conference in South Korea.
Still, China’s rare earth restrictions stunned some observers, who have said thay could forbid any country on Earth from participating in the modern economy, given how critical the minerals are to a vast array of technologies.
On closer inspection, Capital Economics said Beijing’s policy is actually narrower in scope than initially feared. But china economics head Julian Evans-Pritchard and China economist Leah Fahy said in a note Monday that China is also looking to boost its negotiating position and was probably frustrated that the U.S. didn’t seem interested in rolling back