The US and China on the Brink of a New Trade War Over Export Restrictions and Tariffs
The US and China find themselves on the verge of a new phase of trade confrontation, threatening not only the economies of both countries but also global economic stability. Recent decisions by the US and Chinese authorities regarding mutual tariffs and export restrictions indicate an escalation of tensions in bilateral relations.
This is reported by AgroReview
Escalation of Trade Relations Between the US and China
Recently, China announced significant new restrictions on the export of rare earth minerals and magnets essential for the production of electronics, electric vehicles, and military equipment. Beijing added five new elements to the seven already subject to strict restrictions. The US responded with 100% tariffs on Chinese goods and new export restrictions on the supply of critical technologies to China. President Donald Trump also threatened to cancel a planned meeting with Chinese President Xi Jinping, which was set to take place on the sidelines of the Asian leaders’ summit in South Korea.
Both sides have left room for maneuver: China postponed the implementation of new restrictions until December 1, while the US delayed the introduction of corresponding measures until November 1. This indicates a desire on both sides to solidify their positions at the negotiating table through tough statements and ultimatums.
Global Consequences and Strategic Dependence
Recent events demonstrate a shift from competition with elements of cooperation to open confrontation between the two superpowers. China controls about 70% of global rare earth metal production and 90% of its processing, giving it a significant advantage in the market. The US, in turn, dominates in semiconductor manufacturing and software for chips, which China lacks for the development of artificial intelligence.
The United States remains the largest consumer market for Chinese exports, accounting for approximately 15% of revenues. China’s willingness to use the “rare earth metal card” has prompted Washington to intensify its search for alternative sources, particularly in Ukraine, the Democratic Republic of the Congo, Myanmar, and Venezuela. However, building up domestic processing capacity in the US could take decades due to the complexity of procedures and environmental restrictions.
Additionally, the US exports 95% of its rare earth materials to China for processing, as it is more economically viable. Reducing this dependence requires time and significant investments.
Prior to the latest escalation, both sides attempted to ease tensions: the US, in particular, canceled a $400 million arms shipment to Taiwan and allowed the sale of AI chips to China. In response, Beijing tightened control over precursors for fentanyl production and tentatively approved a deal in which an American consortium would receive 80% of TikTok.
However, behind these moves lies a fierce competition for influence and military superiority in the Asia-Pacific region, which will largely determine the trajectory of the 21st century.
“The harsh truth is that in the foreseeable future, the US and China will remain interdependent. A trade war benefits neither side. Since ‘divorce’ is unrealistic — at least in the near term — Washington and Beijing would be better off returning to negotiations,” journalists concluded.