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Edited |Mu Yuji History
In recent days, the game around rare earth between China and the United States has completely erupted global public opinion. On the one hand, U.S. President Trump in social platforms furiously long words, emotions excited to almost out of control, and even talk about imposing 100% tariffs on Chinese goods.
On the other hand, the U.S. capital market voted with its feet. Trump's threat had just been exported. In just three minutes, the S&P 500 index plummeted by 820 points, and the market value of 700 billion US dollars instantly evaporated.
This is not a simple war of words. Behind it is China's strategic shift from passive defense to proactive attack. It is also a key signal that the Sino-US game has escalated from a tariff war and a science and technology war to a rule war.
What is China's trick to make the ever-hard Trump so defensive, and why is this game rewrite the global pattern?
Starting on October 9, at 5 p.m., the Chinese Ministry of Commerce released a six-rule announcement with a list of sanctions.
Directly announced the implementation of export controls on five medium and heavy rare earths, lithium batteries, artificial graphite, and rare earth production and processing equipment and technologies.
This time is interesting, corresponding to the eastern time of the United States is exactly 5 o'clock in the morning, until the Trump administration reacts, it has passed a whole six hours.
As soon as Trump urgently convened a cabinet meeting, in the face of reporters' inquiries, he could only ambiguously say that he just learned the news, has not yet touched the details, the roar of the usual extreme pressure, suddenly no trace.
But not long after, he couldn't breathe, and on the morning of October 10, he wrote a long text of a thousand words on his social platform, for a moment saying that China's move was very strange and hostile.
For a while, he absurdly tied the rare earth control with the Gaza ceasefire agreement, questioning whether the timing was a coincidence.
In fact, anyone with discerning eyes can see that Trump is so excited not because of the timing, but because he was stunned by the double blow.
On the one hand, he had been boasting that he had ended seven wars and hoped to win the 2025 Nobel Peace Prize. As a result, the Nobel Committee ignored him at all, and his dream of a peace prize was completely shattered.
On the other hand, China's rare earth control has just hit the weakness of the United States. You must know that more than 70% of rare earths in the United States depend on China, and the monthly demand is as high as 4,000 to 5,000 tons.
Now that China says it wants to control, it is equivalent to directly choking the necks of core industries such as U.S. military industry and new energy.
What makes Trump lose face even more is that His tariff stick completely failed this time. Six months ago, he tried threatening to impose a 145% tariff increase. As a result, China decisively fought back and he did not get any advantage.
This time, he repeated the same trick and shouted for a 100% tariff. Unexpectedly, the market surrendered before him. The market value of 700 billion yuan was lost in three minutes. Investors voted with real money.
Everyone knows that global supply chains are now deeply bound. If taxes are really increased, only American companies and consumers will be injured. Trump wants to use slogans to transfer conflicts, but the capital market does not buy it.
Maybe someone will ask, is it not rare earth? does the United States itself have no mines? and really not to say, the United States of California has a mountain mine, rare earth reserves are not small, but why should we rely on China?
The answer is simple, there are minerals that are useless, and there must be purely separation technology, and this is precisely China's unique technique.
You may not know that rare earths exist in clusters in nature. When 17 rare earth elements are mixed together, they are like a pile of almost identical beans. It is extremely difficult to separate them.
And the high-tech field needs, is the purity of extremely high single rare earth, such as the phone, radar to use the purity of 99.99%, high-power optical fiber laser such cutting-edge equipment, is to 99.9999% purity, impurities a little more, performance will be greatly discounted.
Before the 1970s, ion exchange method and fractional crystallization method were used to separate rare earths internationally. To obtain a pure rare earth, it had to be repeated hundreds of times, which was time-consuming and expensive.
Later, China's academician Xi Jinping took on an urgent task to separate uranium, he boldly used the extraction technology in nuclear fuels to separate rare earth, and developed a series extraction theory.
This directly subverted the entire industry. In the past, the efficiency of separating praseodymium and neodymium was only 1.4 to 1.5. Academician Xu's push-pull system directly mentioned 4. In the past, it took hundreds of days to design a production line. He used computer simulation to finish it in a week.
More importantly, he did not hide the technology, but instead opened a national workshop, sharing hundreds of formulas free of charge, reducing the cost of China’s single high-purity rare earth to a third of the West.
If the rare-earth control is the first kick, then China's next two hits, more so that the U.S. has no time, these three combined sets of hits, respectively targeted the U.S. rare-earth market, the chip market and the ship transport market, each shot at the most painful seven inches.
The second kick, is the antitrust investigation of Qualcomm, Qualcomm's hegemony in the chip industry, many people have heard, it has long monopolized mobile phone chip technology, and also extra 5% patent tax to other countries.
Whether you use its chip or not, as long as there is related technology in the mobile phone, you have to give money. This kind of patent blackmail not only disrupts the global chip market, but also adds a lot of trouble to China's mobile phone industry.
Now China has launched an investigation, once it is established that Qualcomm is likely to face huge fines, and more importantly, this can break the U.S. monopoly in the field of chips, and give Chinese mobile phone chip enterprises room for development.
In the past, the United States always took the chip card to China's neck, and now China can also in turn regulate the market, which is called in his way.
The third kick, is the special service fee for U.S. ships plus port imports, starting on October 14, the Chinese port charges U.S. ships by tonnage, and increases annually, in 2025, 400 yuan per net ton, 640 yuan in 2026, and directly to 1120 yuan in 2028.
Don't underestimate this money. The cost of an American cargo ship entering the port will increase by about US$20 million per time. What's more, this move directly solves Trump's dream of revitalizing American manufacturing.
If American companies want to sell their goods to China, they must either bear high freight costs or build factories locally in China. Recently, many American companies have begun to consider setting up factories in China. Trump wants to move the industry back to the United States, which has completely gone up in smoke.
Three fists down. The U.S. reaction has been chaotic, and at the government level, the White House has begun to quietly cut spending, apparently unable to withstand the pressure.
At the industrial level, American automakers are in a hurry, publicly warning that the shortage of rare earths will cause factories to shut down production, and Musk's new energy vehicle factory is facing the risk of engine supply cuts.
Even Trump's six-generation F-47, also because of the rarity of the possibility of abortion, he previously said to give the F-47 before retirement, now can only hope for God's blessing.
More interestingly, the United States of America. Not only did Europe not follow U.S. sanctions, it accelerated cooperation with China rare earth companies. Japan and South Korea are also urgently looking for alternative solutions, and no one wants to be buried with the United States.
Many people regard this game as a continuation of the trade war. In fact, it is far more than that. It is a contest about global rules.
In the past few decades, the United States has used to using national security as an excuse to engage in jurisdiction, today to sanction this country, tomorrow to block that enterprise, never thought that anyone else would return, but now, China, using the most familiar way of the United States, has given it a loud ears.
Now look at Trump's thousand-word long, rather than a counterattack, rather than a mourning, he thought that imposing tariffs could scare China.
But we forget that American companies cannot live without China's rare earths, American consumers cannot live without Chinese goods, and the American capital market cannot afford the cost of decoupling.
while China's attitude is very clear. Although it does not want to fight a trade war, it is not afraid of it. Rare earth is not the first card, nor will it be the last.
The game has just begun, and time is clearly not on the side of the arrogant America, when China is defending its interests in a way that governs its own people.
When America’s instruments of hegemony are in turn used on its own, the old world order has emerged with insurmountable cracks.
Source of information:
Trump announced that he will impose 100% tariffs on Chinese goods and implement export controls, 2025-10-11
Xinhua Network: "Stop" on the tenth day the Trump administration begins to cut jobs, 2025-10-11
China to Implement Export Controls on Rare-Earth-Related Technologies Experts: “Standardized Exports” rather than “Prohibited Exports”, 2025-10-10