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Editor | L.Y.
Preliminary
The Chinese counter-reaction said to do so, a day seven announcements sent to the White House, a bidding to the U.S. seven centimeters, at the scene hit Trump a short hand.
When US President Trump held a new round of cabinet meeting, China's Ministry of Commerce issued seven announcements in one day to comprehensively strengthen rare earth export controls, and also include specific foreign entities such as anti-drone technology companies in the list of unreliable entities. It didn't take long for these news to be delivered to Trump's table at the first time.
The six announcements on October 9th constitute a multi-level counter-measure system. At 9 o'clock in the morning, the Ministry of Commerce issued Announcement No.60, which included eight enterprises involved in the export of anti-drone technology, including General Atomics Aeronautical Systems of the United States, in the list of unreliable entities, explicitly restricting their import and export trade and technical cooperation with Chinese enterprises, and requiring them to submit rectification reports within 60 days. The annex of the announcement details the transaction records of these companies' transportation of core components of drones to sensitive areas, involving an amount of over 230 million US dollars.
At 11:17, the No. 61 announcement landed, for artificial diamond, uranium and other four strategic minerals to implement export license management. Unlike the previous total regulation, this control requires export enterprises must declare the final use of goods, if used in semiconductor, military and other fields, need to submit additional import qualification certificate. China is the world's largest supplier of artificial diamond, accounting for 80% of the global output, and the U.S. chip manufacturing enterprises rely on the material to make high precision tools, industry calculation control implementation will make the relevant production costs of the United States increase 18%-25% .
At 1:05 p.m., Announcement No. 62 implemented comprehensive control over rare earths related technologies. This document, known as the "Technical Supply Cut-Off Order" by the outside world, incorporated 12 types of core technologies such as rare earth mining processes and magnetic material manufacturing parameters into the control. It is clear that design drawings, simulation data and other carriers may not be exported without permission. The announcement particularly emphasized that even the transfer of technology through non-trade methods such as joint research and development and consulting requires approval from the Ministry of Commerce, and violators will face fines of more than five times the value of the goods.
The subsequent three announcements focus on the supporting links of the industrial chain: implementing traceability management for the export of lithium battery cathode materials, including high-end manufacturing equipment such as plasma deposition equipment into the control list, and requiring cross-border e-commerce platforms involving strategic materials to file and review. All six announcements are clearly implemented from the date of publication, and the General Administration of Customs has updated the inspection catalogue simultaneously. Major ports such as Beijing and Shanghai have started special inspections on the afternoon of the same day.
The timing of the announcement corresponds exactly to the week before the U.S. corporate delegation’s trip to China, when the U.S. team originally planned to settle orders for Boeing aircraft purchases, soybeans imports, and had to urgently adjust the negotiation plan. A spokesman for the Chinese Ministry of Commerce told an air conference that afternoon that all measures were formulated in accordance with the Export Control Law and were a “necessary response” to recent U.S. sanctions.
Stuck the "seven inches" of the American industrial chain
Among the seven countermeasures, rare earth technology control has the most impact. The rare earth technology control plan released in advance on October 8 and the supporting implementation rules on the 9th formed dual control of "technology + physical objects". China not only controls more than 60% of the world's rare earth production, but also masters 90% of high-end smelting and separation technology. The 2024 report of the U.S. Department of Defense shows that each of its F-35 fighter jets requires 417 kilograms of rare earth materials, and the supply chain relies entirely on China's technology output.
The announcement defines "technical carrier" very targeted, incorporating the process parameters for the manufacturing of NdFeB magnets and the core algorithm for the recovery of rare earth secondary resources. MP Materials, the only rare earth smelting company in the United States, had planned to double its production capacity in 2026, but the company's separation technology originated from China. Its CEO sent an urgent letter to the U.S. Department of Commerce after the announcement was released, admitting that "if we cannot obtain Chinese technology updates, the production expansion plan will be postponed for at least three years."
More critical is the transmission effect of regulation on downstream industries. US new energy vehicle giant Tesla relies on China rare earth magnetic materials for its power batteries. Industry data shows that if the supply of magnetic materials is limited, its Model 3 production capacity will be reduced by 30%. The American Automobile Manufacturers Alliance submitted a petition to the White House on October 10, calling for "avoiding escalating trade frictions and affecting manufacturing employment." The alliance represents the interests of mainstream car companies such as General Motors and Ford, and its pressure has put the Trump administration into a dilemma.
China's preparations have long been paved. Customs data shows that in the first half of 2025, China's rare earth exports to the United States have dropped by 12% year-on-year, and domestic companies have reserved technology patents for more than three years in advance. A report from the Institute of International Trade and Economic Cooperation of the Ministry of Commerce pointed out that the United States needs to invest at least 20 billion US dollars to rebuild an independent rare earth industry chain, with a period of 8-10 years, and it is difficult to find alternatives in the short term.
US is passive.
On October 8, the U.S. Department of Commerce announced the inclusion of 15 Chinese enterprises on the “entity list” on the grounds that they were “suspicious of supplying sensitive parts to third parties” in an attempt to build a tough stance before negotiations.
At the October 10 cabinet meeting, Trump’s response clearly avoided the core issue. At the post-session press conference, he generally stated that “China’s actions are not in line with the principle of trade fairness”, did not mention specific measures such as rare-earth controls and entity lists, and asked reporters whether “the sanctions will be increased”, only by “the assessment of all options” .This vague statement contradicts the previous consistent style of “strong against China”, The Wall Street Journal interpreted as “avoiding aggravated contradictions affecting the interests of the stock exchange”.
The pressure in the agricultural sector has become an important constraint. China's soybean orders have been shut down for five months. Only 40% of Illinois farmer Ron Kindred's 1,700 acres of soybeans have found buyers. Storage costs and loan interest have swallowed up all his profits last year. According to data from the U.S. Department of Agriculture, U.S. soybean exports to China plummeted 67% year-on-year in 2025, while Brazil and Argentina took the opportunity to seize the market. Argentina exported 1.22 million tons of sorghum to China from January to August, almost monopolizing the Chinese market. Trump had promised to use tariff revenue to distribute $14 billion in agricultural assistance, but the government shutdown caused budget dystocia, and farmers' dissatisfaction had begun to ferment.
The rebound at the corporate level is more direct. General Atomics, which is included in the list of unreliable entities, relies on China parts for 30% of its drone systems business. The company's share price fell 7.2% in a single day after the announcement. The American Semiconductor Industry Association sent an urgent letter to the White House, warning that "strategic material control will trigger a chip production capacity crisis" and calling for the resumption of industry dialogue. These pressures have forced the Trump administration to re-evaluate the effectiveness of the "pressure to promote talks" strategy.
Behind the game
China's counter-measures showed obvious institutional characteristics. The six announcement is based on the export control law, the two-use item export control regulations and other laws and regulations, clarify the licensing process, punishment standards and supervisory responsibilities, different from the randomness of temporary measures. In the case of rare-earth technology control, the announcement not only lists the control code and declaration template, but also establishes a cross-sector audit mechanism, the Ministry of Commerce, the Ministry of Industry and Information Technology and the General Administration of Customs will jointly carry out export verification.
This institutionalized countermeasure forms a long-term deterrent. The "dynamic adjustment" clause in the announcement means that more strategic materials may be incorporated into control, Bloomberg said that China can also use more photovoltaic components, rare-earth permanent magnets and other codes, and these areas are critical to the U.S. energy transformation and manufacturing industry recovery. The Chinese side through the improvement of the control system, will turn trade countermeasure from the "short-term game" to the "rule rebuilding", and gradually grasp the game's initiative.
conclusion
China's production capacity in the fields of lithium battery positive polar materials, high-end magnets and so on exceeds 70%, regulatory measures not only affect U.S. enterprises, but also affect European, Japanese and South Korean enterprises that depend on China's supply. The German Volkswagen Group has written to the U.S. government to oppose "politicizing the supply chain", fearing that its own electric vehicle production capacity is involved.
On October 11th, the Office of the United States Trade Representative quietly postponed the tariff hearing on China scheduled for the next day, which was interpreted as a signal to seek easing. This game around seven announcements proves that unilateral sanctions are difficult to work in the context of deep integration of global industrial chains, and precise countermeasures based on rules are reshaping the underlying logic of the Sino-US trade game.
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