Despite reaching a temporary trade truce with the United States, China is showing no signs of easing its grip on rare earth exports — a critical sector that Beijing continues to use as strategic leverage in ongoing geopolitical tensions.

As part of the 90-day agreement recently struck in Geneva, China pledged to suspend certain “non-tariff” countermeasures it had implemented since April 2. However, rare earth controls, imposed just two days later, remain untouched — leaving U.S. businesses in limbo.

What’s at Stake?

Rare earth elements like dysprosium and terbium are essential components in everything from smartphones and electric vehicles to advanced U.S. military systems like the F-35 jet and missile guidance platforms. China dominates the global supply, producing more than 60% of the world’s mined rare earths — and an even greater share of processed materials.

These minerals are not outright banned from export, but since April, Chinese authorities have required government-issued licenses for every single shipment. The bureaucratic bottleneck has caused weeks-long delays for industries that rely on a steady supply of rare earths — from tech manufacturers to defense contractors.

Conflicting Messages

U.S. Trade Representative Jamieson Greer told Fox News that China had agreed to remove its rare earth countermeasures as part of the Geneva truce. “If they don’t do those things, we’re going to be back in a different situation,” he said.

But on the ground, industry insiders say the reality looks very different.

“There’s no real evidence China is pulling back,” said Jon Hykawy, president of industry advisory firm Stormcrow Capital. “These controls are meant to safeguard Chinese interests, especially in critical sectors.”

Gracelin Baskaran of the Center for Strategic and International Studies (CSIS) echoed that view, calling China’s export licensing regime “here to stay” — possibly for the long term.

New Licenses, Not Looser Controls

After weeks of regulatory limbo, some Chinese companies have begun receiving export licenses under a “one batch, one license” system. This means a new permit is required for every shipment — no blanket approvals, no shortcuts.

Two Chinese producers confirmed they recently secured export permits for rare earth magnets used in high-performance applications like automotive and military equipment. One firm mentioned licenses had been granted for exports to Southeast Asia and Europe — including German automaker Volkswagen.

Still, insiders say there’s been no indication of an easing policy. Instead, China has doubled down on enforcement. On May 12 — the day the tariff cuts were announced — authorities launched a crackdown on mineral smuggling and held meetings with provincial regulators to tighten oversight across the supply chain.

U.S. Defense Firms in the Crosshairs?

Although China removed 28 U.S. companies from its export control blacklist — including aerospace and defense firms — it remains unclear whether Beijing will actually approve rare earth shipments destined for military use.

Exporters are now required to submit detailed information about end users, which may present hurdles for U.S. defense contractors bound by Pentagon confidentiality.

“China can easily delay or reject export licenses for national security reasons,” said Thomas Kruemmer of Ginger International Trade and Investment. “This gives Beijing control — and insight — into who’s getting what and for what purpose.”

James Kennedy, president of Three Consulting, said the licensing system effectively gives China “a looking glass” into U.S. industrial and military supply chains.

“You can still get the material,” he said, “but you’ll have to tell China exactly who it’s for — and that gives them a strategic advantage.”

Rare Earths as a Strategic Weapon

China’s dominance in rare earths — and its history of using that power in political disputes — is no secret. In 2010, Beijing halted shipments to Japan during a territorial spat. Last year, it banned exports of critical extraction technologies and added other key minerals like gallium and germanium to its restricted list.

Experts say the export controls are just another tool in China’s geopolitical playbook.

“Rare earths, cobalt, gallium — these are China’s strategic weapons,” Kennedy noted. “The uncertainty they create is just as powerful as an outright ban.”

And with Germany recently receiving some of the first export licenses for rare earth magnets, analysts say China may be using its licensing power to signal diplomatic preferences.

“By granting Volkswagen a license, China is sending a clear message,” said Baskaran of CSIS. “It’s reinforcing ties with Germany while keeping pressure on the U.S. intact.”

Bottom Line

Despite talk of cooperation, China is playing a long game when it comes to rare earths. The export controls may not be a full blockade — but they give Beijing immense power to regulate access, reward allies, and punish rivals.

As global supply chains grow more vulnerable, one thing is clear: China isn’t letting go of its rare earth grip anytime soon.

Source: CNN – China isn’t getting rid of its controls over rare earths, despite trade truce with US

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President Donald Trump’s latest bid to ease trade tensions with China has sparked more skepticism than optimism—especially inside China, where officials brushed off his remarks and netizens mocked him as “chickening out.”

Speaking from the Oval Office, Trump stunned markets on Tuesday by promising a sharp reduction in tariffs on Chinese goods and a more conciliatory approach at the negotiating table. He even pledged to avoid thorny topics like the origins of Covid-19. His remarks briefly cheered Wall Street—but didn’t move Beijing.

China’s Commerce Ministry quickly dismissed Trump’s olive branch. Spokesperson He Yadong insisted that the U.S. must take full responsibility for starting the trade war—and must now fully remove its tariffs if it’s serious about peace.

“Whoever tied the bell must untie it,” He said. “The U.S. needs to cancel all unilateral tariffs and engage in equal dialogue.”

Meanwhile, China’s Foreign Ministry denied Trump’s claim that both nations are in regular talks.

“These are all fake news,” said spokesperson Guo Jiakun, bluntly rejecting the notion that negotiations were underway.

Chinese academics advising the government view Trump’s tone shift as a response to domestic pressure and market turmoil—not a genuine peace offering. According to Wang Yiwei of Renmin University, Trump appears “flustered” and inconsistent, making it hard for Beijing to trust him.

“He says one thing today, another tomorrow,” Wang said. “He’s trying to bait China into talks, but it’s not working.”

Wu Xinbo, a U.S. policy expert at Fudan University, echoed that sentiment. “China is in no rush,” he said. “We’re prepared to wait—and negotiate on our terms.”

Trump’s apparent pivot came just after a private meeting with CEOs from major U.S. retailers—Walmart, Target, Home Depot, and Lowe’s—who expressed concern over the economic fallout of the tariffs. The pressure is growing as fears of a global recession mount.

Though Trump hasn’t provided specifics, a White House official told the Wall Street Journal that current tariffs—set as high as 145%—could be slashed to between 50% and 65%.

But Wang, currently in Washington, said that’s not nearly enough. “If you want to talk seriously with China, cancel all the tariffs—then we can talk.”

In China, Trump’s remarks were met with ridicule. On the social media platform Weibo, the hashtag “Trump chickened out” racked up over 150 million views. One user wrote, “If they won’t even cancel all the tariffs, why even bother negotiating?”

Despite the government’s public defiance, some Chinese experts are quietly expressing concerns.

An anonymous foreign policy expert told CNN that the sky-high tariffs are “torturing” China’s slowing economy and could lead to social unrest and instability.

“Authorities aren’t telling the truth,” he said. “Our foreign trade is suffering. Jobs are at risk. We can’t afford to drag this out much longer.”

Voices critical of Beijing’s hardline stance are often silenced. A post by a Chinese Academy of Social Sciences researcher calling retaliatory tariffs “completely wrong” was quickly censored after it gained traction on WeChat.

“There’s no point in hurting ourselves just because the U.S. is doing the same,” the researcher wrote.

Despite Xi Jinping’s recent diplomatic tour of Southeast Asia to boost China’s image as a stable partner, analysts warn the country’s growth outlook remains shaky. China has set a 5% growth target for 2025—but economists say it’s an uphill battle.

Goldman Sachs recently warned that U.S. tariffs would continue to weigh heavily on China’s economy. Even with a surprising 12.4% export surge in March, the momentum is unlikely to last.

The anonymous Chinese expert believes a resolution is coming—eventually.

“This is about saving face. China is waiting for the U.S. to blink first, so it can frame any deal as a win,” he said.

Source: CNN – Trump’s trade war olive branch met with derision and mistrust inside China

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Just 48 hours after former U.S. President Donald Trump unveiled sweeping new tariffs on countries around the world, including a staggering 34% tariff on all Chinese imports, Beijing struck back with matching measures on American goods and companies. China’s Commerce Ministry didn’t mince words, calling the move “a mistake upon a mistake” and warning that “China will fight to the end” if provoked further.

“The U.S. threat once again exposes its blackmailing nature. China will never accept it,” the ministry said in a strongly worded statement.

Rather than scrambling to strike deals like many U.S. allies caught in the tariff crossfire, China is standing firm, presenting itself as a calm and confident counterbalance to what it calls “unilateral bullying” by the U.S.

The official line from Beijing? China’s economy can take the hit—and might even come out stronger.

“US tariffs will have an impact, but the sky won’t fall,” read a commentary in the state-run People’s Daily, China’s Communist Party mouthpiece.

“The more pressure we get, the stronger we become.”

Beijing’s narrative is one of resilience and defiance, backed by what it calls the “institutional advantages” of its political system. The leadership is betting that it can weather the storm—and perhaps even emerge as a new anchor in a shifting global trade landscape.

Trump’s latest tariff salvo threatens to bring total U.S. tariffs on Chinese goods to over 54%. In response, China rolled out its own 34% tariffs and announced restrictions on key U.S. exports like rare earth minerals—critical components in electronics and defense tech.

Not stopping there, Trump doubled down, warning that unless China drops its retaliatory tariffs, the U.S. will impose an additional 50% duty midweek. He also canceled previously requested trade talks with Chinese officials.

This high-stakes game of economic chicken is fueling concerns that the world’s two largest economies are locked in a spiral with no off-ramp in sight.

“No high-level diplomacy means no safety valve,” said Craig Singleton, a senior fellow at the Foundation for Defense of Democracies.
“The longer this drags on, the harder it becomes for either side to de-escalate without losing face.”

As Trump’s tariff agenda sweeps across allies and rivals alike, Beijing is trying to reshape its image—from authoritarian powerhouse to defender of open markets.

“China will only continue to open its doors wider,” the Foreign Ministry said Saturday, adding that it remains committed to globalization “regardless of the changing international landscape.”

Chinese officials have been busy wooing American businesses. Vice Commerce Minister Ling Ji recently hosted a meeting with U.S.-funded companies like Tesla and GE HealthCare, pitching China as a “safe, promising place for investment.”

The message? If the U.S. wants a trade war, China’s not afraid. And for countries weary of rising protectionism, China is ready to be a steady partner.

Economists and scholars inside China say this trade war isn’t just about money—it’s about shaping the future of global trade.

“China and the U.S. are now direct rivals in reshaping the international trade order,” said Professor Ju Jiandong from Tsinghua University.
“We’re ready to compete.”

But skepticism lingers. Beijing has long used its massive market as leverage, and some countries remain wary of becoming too dependent on Chinese exports. Still, with U.S. tariffs slamming allies like Japan, South Korea, and the EU, many nations may be forced to look eastward for economic stability.

Even in cautious Singapore, Prime Minister Lawrence Wong didn’t sugarcoat it:

“The era of rules-based globalization is over. We’re entering a new phase—more arbitrary, protectionist, and dangerous.”

Despite its confident front, China isn’t immune to the fallout. After years of grappling with a real estate crisis, high local government debt, and post-COVID economic sluggishness, the trade war adds fresh pressure.

To counter the export drag, China has rolled out new policies to boost domestic consumption, with state media promising “extraordinary efforts” to keep the economy growing.

Unlike Western governments, China’s leadership doesn’t face voter backlash. But economic stability remains crucial to maintaining public trust and political legitimacy.

With both Washington and Beijing locked into their positions, the tariff battle shows no signs of easing. And with each new escalation, the global economy inches closer to a new—and far more uncertain—trade era.

How far will it go? That remains the trillion-dollar question.

Source: CNN – China calls Trump’s new tariff threat ‘a mistake upon a mistake’ and looks for opportunity in global trade war

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Asian markets took a sharp nosedive on Monday, amplifying a global stock market rout sparked by US President Donald Trump’s escalating trade war.

In Japan, the Nikkei 225 plummeted over 8% right after the opening bell, dipping below the critical 33,000 mark for the first time since August 2024. The broader Topix index fared similarly, sliding more than 7.5%, though it managed to recover slightly from its steepest losses.

Japanese Prime Minister Shigeru Ishiba addressed the crisis, reaffirming that his government will continue urging Trump to reduce tariffs on Japan. However, he acknowledged that meaningful progress wouldn’t be immediate. “The government must do everything possible to mitigate the economic fallout,” Ishiba told parliament, emphasizing support for local businesses and job protection.

Trump’s latest move is a 24% tariff on Japanese imports, which is set to take effect later this week despite Japan being a key US ally under their defense treaty.

Meanwhile, the global ripple effect from the trade war has intensified, with Asian markets mirroring the worst two-day slump on Wall Street in five years. US stock futures tanked on Sunday evening after two days of heavy losses, which have already wiped out over $5.4 trillion in market value.

Trump’s sweeping tariff policies, which began taking effect over the weekend, have triggered strong pushback from global investors. The US’s newly imposed tariffs have been met with retaliatory action from China, which slapped a 34% tariff on all US goods on Friday, further stoking fears of a full-blown, destructive trade conflict.

On Sunday, Trump downplayed the market turmoil, stating he didn’t intend to crash markets, though he refrained from predicting what lies ahead. “What’s going to happen with the market? I can’t tell you,” Trump remarked aboard Air Force One. “But I can tell you, our country has gotten a lot stronger, and eventually it’ll be a country like no other.”

Across Asia, the damage was widespread. South Korea’s Kospi index plunged more than 4.8%, triggering a circuit breaker designed to prevent panic selling. Taiwan’s Taiex saw a staggering drop of 9.7%, with major exporters like TSMC and Foxconn halting trading after their shares plummeted nearly 10%.

In Australia, the ASX 200 index shed as much as 6.3%, while New Zealand’s NZX 50 index followed suit with a 3.5% loss.

As US stocks brace for another round of sharp declines, analysts warn that the S&P 500 is perilously close to entering bear market territory, defined by a 20% drop from its peak. This downturn signals mounting uncertainty, not only for investors but also for the broader global economy.

The question now is how long this turmoil will last and whether Trump’s trade policies will lead to long-term economic damage or if the markets can eventually recover from the turbulence.

Source: CNN – Asian markets plunge as Trump’s global tariff turmoil deepens

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Introduction Florida Senator Marco Rubio delivered a stark warning during his Senate confirmation hearing on Wednesday, highlighting the critical challenges posed by China and addressing America’s position on global alliances. As Rubio vies to become the next Secretary of State, his testimony emphasized a need for swift policy adjustments to protect U.S. interests.

China: America’s ‘Biggest Threat’ Rubio painted a grim picture of America’s “unbalanced relationship” with China, describing it as the greatest threat to U.S. prosperity in the 21st century. He warned that without significant shifts, China would dominate areas crucial to American security and daily life.

“If we don’t change course, we are going to live in a world where much of what matters to us on a daily basis — from our security to our health — will depend on whether the Chinese allow us to have it or not,” Rubio testified.

Rubio criticized globalism, claiming it had been weaponized against the U.S., and urged policymakers to prioritize “core national interests.”

Affirming NATO’s Value When asked about NATO, Rubio called the 75-year-old alliance “very important,” aligning with President-elect Trump’s critique that European allies should contribute more to their defense. Rubio stressed that the U.S. must decide its role within the alliance, whether as a primary defender or a “backstop” against aggression.

Warm Reception in the Senate The confirmation hearing highlighted Rubio’s bipartisan appeal. Joking about the “surreal” nature of being on the other side of the dais, Rubio quipped:

“I hope I can earn your support, whether it’s because you believe I would do a good job or because you want to get rid of me.”

Colleagues on both sides of the aisle welcomed Rubio warmly, viewing him as a “responsible” pick likely to maintain America’s global leadership.

Evolving Political Career Rubio’s journey reflects an evolving relationship with Trump, transitioning from rivals in the contentious 2016 GOP primaries to close allies. Rubio, once a proponent of immigration reforms, has shifted toward a hardline stance mirroring Trump’s policies, such as aggressive deportation measures.

If confirmed, Rubio would become the first Latino to serve as Secretary of State. His experience on the Senate Foreign Relations and Intelligence Committees has shaped his firm approach to global threats.

Strong Stance on Cuba Rubio reiterated his opposition to softening policies toward Cuba, criticizing the Biden administration’s decision to rescind Cuba’s designation as a state sponsor of terrorism. He firmly supported reversing this decision, stating:

“Nothing that the Biden administration has agreed to in the last 12 or 18 hours binds the next administration.”

Historical Context of Secretaries of State Rubio’s potential appointment follows a legacy of impactful Secretaries of State, including James Baker and Condoleezza Rice. However, the relationship between Rubio and Trump stands out due to their tumultuous history during the 2016 GOP primaries.

Trump’s relationship with former Secretary of State Rex Tillerson, whom he fired via social media, adds intrigue to Rubio’s nomination.

Conclusion Marco Rubio’s confirmation hearing underscored his hawkish stance on China, commitment to NATO, and robust foreign policy credentials. With bipartisan support expected, Rubio is poised to play a pivotal role in shaping U.S. diplomacy, although his influence may remain secondary to the president. If confirmed, his tenure could mark a new chapter in America’s global leadership.

Source

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‘Ridiculous Fees’ and U.S. Generosity

“The fees being charged by Panama are ridiculous, especially given the extraordinary generosity the U.S. has shown to Panama,” Trump declared. Referring to the tolls as a “complete rip-off,” he vowed to put an end to the situation immediately.

Trump further described the canal as a “vital national asset” for the U.S., emphasizing its importance for commerce and national security. He also warned against allowing the canal to fall into the “wrong hands,” a veiled reference to China’s growing influence in the region.

Historical Context: U.S.-Panama Relations and the Canal’s Control

The Panama Canal, completed by the U.S. in 1914, remains a key shipping route between the Atlantic and Pacific Oceans. The U.S. relinquished full control of the 51-mile canal to Panama in 1999 under the Torrijos-Carter Treaties, which had been negotiated in 1977 by President Jimmy Carter. The treaties included provisions allowing the U.S. to defend the canal’s neutrality.

Today, the canal is administered by the Panama Canal Authority. The U.S. is its largest customer, accounting for about 75% of the cargo passing through annually, with China as the second-largest user. A Hong Kong-based Chinese company also operates two of the five ports adjacent to the canal, one on each end.

Drought-Driven Challenges

Severe drought conditions have severely impacted the canal’s operations. From October 2023 to September 2024, the number of ships transiting the canal dropped by 29%, falling from 14,080 vessels the previous fiscal year to 9,944. The disruption has added to global supply chain pressures, according to U.S. National Economic Council Director Lael Brainard.

Rising Geopolitical Tensions

Trump’s remarks reflect a likely shift in U.S. diplomacy, especially regarding China. In his post, Trump asserted that the canal “was not given for the benefit of others,” warning that if Panama failed to adhere to what he described as the moral and legal principles of the treaties, the U.S. would demand the canal’s return.

“This is not China’s to manage,” Trump said, adding that the canal must remain aligned with U.S. and Panamanian interests. “To the officials of Panama, please be guided accordingly!”

Potential Competitor: Nicaragua’s Canal Proposal

Adding to the complexities, Nicaraguan President Daniel Ortega recently announced plans for a new interoceanic canal, spanning 276.5 miles (445 km). Ortega pitched the project to Chinese investors at a regional summit, citing frustrations with Panama’s waterway. The proposal rekindles an idea dating back to 1854 when the U.S. first considered constructing a canal through Nicaragua.

Panama’s Response Pending

An official from Panama’s government acknowledged Trump’s statements and promised a formal response in the coming days. Meanwhile, the geopolitical implications of Trump’s rhetoric and the competition posed by Nicaragua’s canal proposal underscore growing tensions in Central America’s strategic waterways.

Source

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