Thomas Kolbe
China has intensified its trade war with the United States by imposing a sweeping ban on rare earth exports and disrupting global supply chains critical for electric vehicles, wind turbines, and military technology. These minerals are the lifeblood of modern innovation, and Beijing’s decision to weaponize its dominance aims to pressure Washington into concessions. Yet this high-stakes move raises a critical question: Is China overestimating its economic resilience?
The ban risks destabilizing its own economy, which relies heavily on exports, and could provoke a broader backlash from Western powers. As the trade war escalates, the global balance of power hangs in the balance, with both sides testing each other’s endurance.
The U.S.-China trade conflict is at a fever pitch. American tariffs on Chinese imports have soared to 145%, a formidable barrier designed to curb Beijing’s economic influence and protect domestic industries. In response, China’s export restriction, implemented on April 4, has drastically reduced rare earth shipments, posing a threat to global industries. This escalation could prove self-destructive for China, where exports account for nineteen percent of GDP and sustain over 150 million jobs, directly or indirectly. This economic engine, fueled by a mercantilist strategy of currency manipulation, capital controls, and intellectual property theft, generates a $1 trillion annual trade surplus—equivalent to one percent of global economic output. By jeopardizing this lifeline, Beijing is gambling with its economic stability and global standing.
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