The trade tensions between the US and China are back in full swing, and this time, both sides are pointing fingers. President Trump expressed surprise and accused China of hostility after its recent move to impose export controls on rare earths. But China has a different story to tell.
According to Beijing, it was the US that escalated tensions by expanding restrictions on Chinese companies. This led China to further assert its control over critical minerals, which are essential for various industries.
The rapid escalation of tensions between the world's two largest economies has sent shockwaves through markets and industries worldwide. It has rekindled fears of a trade war similar to the one in spring, where tariffs reached unprecedented levels, almost resembling trade embargoes.
The renewed tensions also cast doubts on the planned meeting between President Trump and Chinese leader Xi Jinping in South Korea. Trump suggested canceling the meeting, but Treasury Secretary Scott Bessent believes it will still happen.
China's commerce ministry remains open to talks but emphasizes that the US cannot threaten new measures while seeking dialogue. Chinese experts argue that much of the current escalation could have been avoided if the Trump administration hadn't imposed more restrictions in September.
Jin Canrong, a government adviser and professor, believes China's actions were merely a response to Washington's 'petty maneuvers.' He writes, 'The US now pretends to be innocent and even tries to play the victim.'
US-China relations had shown signs of improvement over the summer, especially after trade talks in Madrid and a phone call between Xi and Trump. However, just ten days after that call, the US significantly expanded its export restrictions, targeting subsidiaries of sanctioned companies.
Wu Xinbo, an advisor to the Chinese foreign ministry, calls this move 'extremely malicious' and believes it shows Trump acting in bad faith. He adds, 'If the US hasn't realized the consequences of such actions against China, then Trump's team is incompetent.'
China's commerce ministry echoes this sentiment, citing examples like the US plans to charge fees on Chinese ships docking at American ports. These actions, the ministry says, have harmed China's interests and undermined the atmosphere of bilateral talks.
Paul Triolo, a China and tech expert, compares the current situation to the downward spiral of relations in May. 'We're at the edge of an abyss again,' he says. 'But now, the stakes are even higher because both sides understand the consequences.'
After a trade truce in Geneva, where both countries agreed to roll back tariffs, Trump dropped several bombshells. He banned the use of Huawei's AI chips, implemented new export curbs on chip designing software, and threatened to revoke Chinese student visas.
China's response, tightening its control over rare earths, is seen as a logical and proportional move by Triolo. China holds a near-monopoly on these minerals, and the new rules increase the number of elements under export control and extend restrictions to production technologies and overseas use.
The new restrictions have impacted global industries and tech supply chains. Factories worldwide, from automakers to defense sectors, have reported shortages of rare earths since China introduced licensing requirements in April.
China's commerce ministry assures that the tightened rules are not export bans and that licenses will be approved for applications that meet the requirements. Experts compare Beijing's measures to the restrictions Washington has imposed on semiconductors, limiting the export of chips and chipmaking equipment to China.
Beijing's move this week signals its willingness to adopt similar tactics, despite long criticizing the US for exerting 'long-arm jurisdiction.'
Wu of Fudan University says, 'From Trump's first term to Biden's and now to his second, the US has piled up tariffs, tech restrictions, and sanctions against China. Beijing has kept a record of these moves, and now it's time to settle the score.'
As for the highly anticipated meeting between the leaders, Wu believes the onus is on the US to take concrete actions to improve ties.
Trump's recent post on Truth Social, where he said the US wants to help, not hurt China, suggests a shift in tone. Wang Yiwei, another scholar, believes China is fully prepared to deal with Trump, understanding his tactics and America's weaknesses.
Wang adds, 'Right now, I think it's the US that's getting anxious, not China. Trump faces domestic pressure with a government shutdown, and his party controls both branches.'
With China's control over rare earths, Wang says US dependence will continue in the short term. His message to Americans is to be realistic and cooperate with China.
