Trump lost his first trade war in China. China knows it has an advantage. US in the descent. China in the ascent.
Larry C. Johnson is a former CIA officer and intelligence analyst, and former planner and advisor at the US State Department’s Office of Counter Terrorism. As an independent contractor, he has provided training for the US Military’s Special Operations community for 24 years. Today he runs the website Sonar21
Cross-posted from Sonar 21
Donald Trump and the citizens of the US are about to learn some very hard, costly lessons. If you’re going to get into a trade war with another country, you should be sure that you control or have access to all the critical minerals and resources you need to produce essential items, such as weapons, drones or prescription drugs. Trump and his team failed to understand this critical issue and have now provoked China into a trade war that the US cannot win.
Trump has been provoking China for several years. For example, Huawei was banned in the United States through an executive order issued by President Donald Trump on May 15, 2019, which led to the Department of Commerce adding Huawei to its Entity List, restricting US companies from doing business with Huawei due to national security concerns. The Federal Communications Commission (FCC) later voted unanimously to ban the sale of new Huawei devices and equipment in the US to further secure communications networks.
More recently, in response to Trump’s tariffs, China stopped purchasing soybeans from US farmers and is now buying almost exclusively from Brazil. That has caused some major pain for US farmers, and Trump recently announced that was one of the issues he planned to discuss with Xi at the upcoming APEC summit. Looks like that won’t be happening.
China is now punching back with power. Arnaud Betrand, writing on his X account, lays it out in detail:
This really isn’t getting enough attention. China has truly gone all in on export controls today, in a major way.Not only did they announce the unprecedented rare earths restrictions that I posted about earlier (targeted, among others, at the advanced semiconductors sector) but they issued 4 consecutive announcements in total with other export controls on: The machines and expertise to process rare earths – not just the rare earths themselves, but all the specialized equipment and technical know-how to turn rare earth into usable materials (obviously making it all the harder to try to move rare earth processing away from China).
High-performance batteries – specifically those above 300 Wh/kg needed for long-range EVs and advanced drones. And, again, export controls on all the factory equipment to make them too.
The materials inside batteries – both graphite anodes and cathode materials (the two electrodes that are essential for batteries to function at all). Export controls also cover the specialized equipment to manufacture all of these components.
Industrial diamonds and cutting tools – the ultra-hard materials that are used ubiquitously in precision manufacturing, for instance to cut silicon wafers for computer chips.
This is absolutely unprecedented. With this China effectively gets veto power over three critical supply chains simultaneously: advanced semiconductors (via rare earths and related equipment), battery-powered vehicles and drones, and precision manufacturing across industries (via superhard materials). It will all officially take effect on November 8, in one month.
The official explanation is to prevent “dual use” and “safeguard national security”, incidentally the same official explanation the US gave for its own chip export controls to China. As Mao once said: “our method is to learn warfare through warfare”… Or you could also say what goes around comes around…Here you can find all the announcements collated in a Guancha article (in Chinese). It’s very, very extensive: https://guancha.cn/politics/2025_10_09_792641_2.shtml…Arnaud Bertrand @RnaudBertrand
This is actually big, potentially huge, notably because China’s new rare earth export controls include a provision (point 4 here: https://mofcom.gov.cn/zwgk/zcfb/art/2025/art_7fc9bff0fb4546ecb02f66ee77d0e5f6.html…) whereby anyone using rare earths to develop advanced semiconductors (defined as 14nm-and-below) will require case-by-case approval.Which effectively gives China de-facto veto power over the entire advanced semi-conductor supply chain as rare earths are used at critical steps throughout – from ASML (who use rare earths for magnets in their lithography machines: https://asml.com/en/news/stories/2023/6-ingredients-robust-supply-chain…) to TSMC.
The export controls are also extra-territorial: foreign entities must obtain Chinese export licenses before re-exporting products manufactured abroad if they contain Chinese rare earth materials comprising 0.1% or more of the product’s value.So China is effectively mirroring the US semiconductor export controls that were used against them, with its own comprehensive extraterritorial control regime, except with rare earths.
Well, that has enraged Trump. I find it fascinating that he fails to understand that his own past actions have provoked the Chinese to do this. Trump Truthed this today:
Donald Trump labors under the delusion that the US market is essential for China’s economic success. Looks like the Chinese disagree. I posted an image at the top of this article… It is an X-post by Zhao DaShuai 东北进修. Although she does not represent the government of XI JinPing, I suspect her sentiments reflect the attitude of most citizens of China. He writes:
We are simply sick and tired of the nonstop demonization of anything related to China by the US. This export ban of rare earth minerals is just the start. If the US does not correct its course, and stop interfering our legitimate rights for development, then we will engineer global economic collapse.
Do you really think you can take China down, without us taking you down too? After that, we will let our weapons do the talking.
Okay America, you’ve been warned.
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