The fragile truce in the US-China trade war has crumbled, revealing a deep chasm of misunderstanding between the world’s two most powerful economies.
President Trump expressed shock at China’s new controls on rare earth metals and related products, claiming he was “blindsided” after months of what he perceived as a “very good” relationship. Chinese commentators, however, insisted Beijing’s actions were a direct response to Washington’s intensifying technological restrictions, which they viewed as provocative despite American declarations of goodwill.
Adding to the tension, both nations appear convinced they hold the upper hand, believing the other has misjudged the situation and gone too far.
The blame game continued when China awoke to President Trump’s declaration of new, sweeping 100 percent tariffs on Chinese imports, set to take effect November 1st. While Chinese analysts and commentators condemned the move, Beijing’s government remained officially silent.
Hu Xijin, the prominent former editor of the state-controlled Global Times, sharply questioned Trump’s stance on social media, stating, “What is Trump feeling wronged about? What is he angry about? He should first understand what the U.S. has done to China!”
This latest tariff threat from President Trump underscores the critical importance of controlling key raw materials and advanced technologies, like rare earth metals and batteries, essential for future industrial growth.
However, if neither side yields, these renewed hostilities are bound to extend beyond trade, potentially impacting other critical areas like military communication and artificial intelligence governance—fields where both countries had hoped to make progress.
“The situation is quite surprising, considering that there have already been four rounds of China-U.S. trade negotiations,” noted Zhu Feng, a professor of international relations at Nanjing University, referencing recent diplomatic meetings in Geneva, London, Stockholm, and Madrid.
President Trump had previously mentioned expecting to meet with China’s leader, Xi Jinping, in South Korea this month. However, he later stated, “Now there seems to be no reason to do so.”
“This serves as a potent reminder of the deepening fragility in China-U.S. relations,” Professor Zhu added.
The new trade tensions reveal a fundamental divergence in how the United States and China define their rivalry. For Mr. Trump, trade and technology issues could be treated separately, allowing the US to escalate tech restrictions on China while simultaneously pursuing a major trade deal. Conversely, China views trade and technology as integral parts of a broader American strategy to contain its rise.
“If the trade talks fail, I’m deeply concerned that the all-fronts confrontation between the two sides will escalate,” Professor Zhu warned.
While Mr. Trump, through a post on Truth Social, accused China of imposing its rare earths controls “out of nowhere,” Chinese commentators asserted that Washington was to blame for the escalation.
Hu, the former editor, suggested China’s rare earth controls were a direct response to new US measures targeting Chinese companies, including expanded export restrictions. He emphasized China’s growing confidence in its ability to withstand Washington’s intense pressure tactics.
“Chinese society is truly unafraid of the United States now, and high U.S. tariffs and other levers have lost their deterrent effect on China,” he stated via text message.
Nevertheless, the broad scope of China’s new rare earths controls was seen by many observers as a significant escalation. These measures forbid shipments of critical materials to military equipment manufacturers in Europe and the United States, and prevent the transfer of technology or information that could help other nations establish their own production capabilities.
China’s audacious move might have been based on an assessment that Mr. Trump was in a vulnerable position. Earlier this summer, Trump’s trade negotiators showed a willingness to compromise on tariffs, and the president had expressed keenness to visit China. Meanwhile, China’s boycott of US soybean purchases has severely impacted American farmers.
Domestically, American politics are in disarray, marked by a government shutdown. Furthermore, despite US promises to reduce its dependence on China for rare earth metals, that goal remains a distant prospect.
China, buoyed by a recent large-scale military parade that showcased advanced new weaponry and reinforced its alliances with Russia and North Korea, feels it has strong cards to play.
“China certainly knew Trump would react strongly, and it didn’t underestimate him,” said Wang Yiwei, a professor of international relations at Renmin University in Beijing. “But there are several areas where China has the upper hand.”
Professor Wang suggested that China might be leveraging its position to push Mr. Trump towards a more comprehensive agreement on other facets of the US-China relationship, not just trade.
Beijing also seeks concessions from the Trump administration regarding its support for Taiwan, the democratic island China claims as its own territory, and on the controls imposed on advanced semiconductor chips, which are crucial for China’s ambitions in artificial intelligence and other sectors.
China’s assertive measures could also serve as a message to its domestic audience, aiming to instill confidence despite the country’s economic slowdown and housing market issues. Additionally, it might be a signal to other nations and blocs, like the European Union—who often face pressure from Washington to align with one superpower—that they should not underestimate China’s strength.
“This communicates that China is very confident and powerful,” Professor Wang asserted. “Don’t be afraid. Don’t sacrifice China to curry favor with the United States.”
However, some experts cautioned that Beijing may have miscalculated, potentially overplaying its hand and underestimating the aggressive nature of Mr. Trump’s likely response.
Yun Sun, director of the China program at the Stimson Center in Washington, observed that Beijing had developed a “dangerous new habit” of underestimating America’s resolve and capacity for retaliation.
China might have assumed a summit between Mr. Trump and Mr. Xi was a certainty, and that the U.S. was eager to finalize a deal. The Trump administration had previously eased tariffs in April, reducing an initial 145 percent additional tariff to 30 percent, while China maintained a 10 percent additional tariff on American goods.
“Where the U.S. was showing good will, China saw a manifestation of American weaknesses,” Dr. Sun noted.
Professor Zhu of Nanjing University acknowledged that while China must defend its interests, it should remain wary of Mr. Trump’s unpredictable nature.
“If the trade war escalates further, that is definitely not in China’s interests,” he concluded.
Indeed, if Mr. Trump’s additional 100 percent tariffs on Chinese goods are implemented, they could severely damage the economy. Exports to the United States—both direct and via intermediate countries like Vietnam and Mexico—have been crucial in sustaining China’s economy.