Source: Global Times

[Global Times special correspondent in the United States Li Zhun Global Times reporter Yu Ruitong Global Times special correspondent Zhen Xiang Yu Wen] The spokesperson of the Ministry of Commerce answered reporters 'questions on the 12th on China's recent economic and trade policies and measures. In response to the US threat to impose a 100% tariff on China and implement export controls on all key software on the grounds that "China adopts export controls on rare earths and other related items," the spokesman said: Frequent threats with high tariffs are not the right way to get along with China. China's position on the tariff war is consistent. We are unwilling to fight it, but we are not afraid of it. China urges the United States to correct its wrong practices as soon as possible, be guided by the important consensus reached by the two heads of state on the phone, safeguard the hard-won results of consultations, continue to play the role of the China-US economic and trade consultation mechanism, and resolve respective concerns through dialogue on the basis of mutual respect and equal consultation., properly manage differences, and maintain the stable, healthy and sustainable development of China-US economic and trade relations. If the United States insists on its own course, China will resolutely take corresponding measures to safeguard its legitimate rights and interests. In the United States, voices urging the U.S. government not to fight a trade war and stabilize the market have also dominated the mainstream. The CNBC website said that after the United States threatened to impose a 100% tariff increase on China, U.S. stocks evaporated US$2 trillion a day, setting the worst performance since Liberation Day in April this year. The Washington Post published an editorial recommending that the U.S. government negotiate with China and not engage in a trade war.

Data chart of US stocks evaporating US$2 trillion in one day

China elaborates on considerations for implementing export controls on related rare earth items

On October 9, China's Ministry of Commerce and the General Administration of Customs issued an announcement to implement export controls on some overseas rare earth-related items and rare earth-related technologies containing China ingredients.

A spokesperson for the Ministry of Commerce said that this is a legitimate practice for the China government to improve its own export control system in accordance with laws and regulations. The current world situation is turbulent and military conflicts occur from time to time. China has noticed that medium and heavy rare earths related items have important applications in the military field. China is a responsible major country and implements export controls on related items in accordance with the law. The purpose is to better maintain world peace and regional stability and fulfill international obligations such as non-proliferation. Before the measures were announced, China had notified relevant countries and regions through the bilateral export control dialogue mechanism.

Subsequently, the Chinese government will conduct license review in accordance with the law, allow the application to comply with the provisions, at the same time, actively consider the application of general license, license exemption and other various facilitation measures to effectively promote compliance trade. The Ministry of Commerce spokesman stressed that China's export control is not a ban on exports, as long as it is used for civilian purposes, compliance export applications can be approved, relevant enterprises need not worry.

In response to the US's unreasonable accusation of China's new rare earth control regulations, saying that China has "become hostile" and threatening to impose 100% tariffs on Chinese goods from November 1st, a spokesman for China's Ministry of Commerce said that the US statement is a typical "double standard". For a long time, the United States has generalized national security, abused export controls, adopted discriminatory practices against China, and implemented unilateral long-arm jurisdictional measures on many products such as semiconductor equipment and chips. There are more than 3,000 items on the US control list, while there are only more than 900 items on the China export control list. The United States has been using the minimum content rule of export control for a long time, as low as 0%. The relevant measures taken by the United States have seriously damaged the legitimate rights and interests of enterprises, seriously impacted the international economic and trade order, and seriously undermined the security and stability of the global production and supply chain.

The spokesman said, especially since the September China-U.S. Madrid economic and trade talks, in just over 20 days, the U.S. continued to introduce a series of restrictive measures against China, including several Chinese entities in the list of export control entities and specially designated national lists; arbitrarily expanding the scope of controlled enterprises through penetration rules, affecting thousands of Chinese enterprises; ignoring China's concerns and goodwill, and committing to land China's maritime, logistics and shipbuilding industry 301 measures.

China's response immediately attracted the attention of all parties. According to the CNBC website of the United States, China defended its new rare earth regulations, criticized the "double standards" of the United States and refuted Washington's allegations. Reuters quoted analysts as saying,Trump isThe implementation date of imposing tariffs on China is set at November 1st, leaving a certain negotiation time. By clarifying the reasons behind its rare earth control measures, China has outlined a possible negotiation path. "Now the ball is on the US side".

Chinese flag and American flag data map

$2 trillion a day.

According to CNBC reports, that morning, the Standard Pur 500 index was only a few points away from a new record high, but after Trump issued the post, the $2 trillion market value evaporated. On the closing day, the Standard Pur 500 index fell by 2.7%, the Nasdaq index fell by 3.56%, making the worst performance since April's "liberation day", when Trump announced higher than expected "peer tariffs" for all countries in the world, leading to a stock market boom. The company said that NVIDIA, AMD and other chip manufacturers dropped on the 10th, but the drop was not only the stock of companies directly related to China's trade.

CNBC's article believes that the reason for the plunge in U.S. stocks is that although the trade negotiations between the U.S. government and China are progressing slowly, the market generally believes that the two countries will eventually reach some agreements and the overall relationship is improving. "If Trump's threats are actually implemented, investors are worried that the U.S. economy may struggle to bear the heavy burden."

The website of Fortune magazine in the United States noted that the trend of the US dollar was "very unhealthy" after the US issued a tariff threat. According to the report, in general, when the stock market falls, funds will be transferred to the US dollar, because the US dollar has always been regarded as a safe "safe haven" in the past. Today, the market is falling and gold is strengthening, and funds are not diverted to the US dollar. The current situation for the dollar is worse than it was in April this year. Robin Brooks, a senior fellow at the Brookings Institution in the United States, bluntly stated: "The market believes that the United States is in a weak position in a trade war with China."

The Washington Post published an editorial on the 12th, arguing that China and the United States are in a difficult competition for influence and military superiority, which will affect the pattern of the 21st century. The situation continues to escalate, and some people even begin to fantasize about "decoupling" or "breaking the link" between the two economies. However, the truth is that the United States and China will remain dependent on each other for the foreseeable future. A trade war is not good for either side. Since a "breakup" is unrealistic, at least in the short term, Washington and Beijing had better restart dialogue.

Many economists are also not optimistic about the role of the US tariff threat. Bloomberg quoted an interview with American economist Mary Laffery as saying, "China has learned how to fight a trade war", and Trump's threat of imposing 100% tariffs is completely useless. The headline of the report on the website of Fortune magazine on the 11th said: Top economists believe that there is no "worse time" than announcing new tariffs on China during the "shutdown" of the US government and the debate on artificial intelligence valuation.

Also strongly opposed to the new tariffs are American farmers. The New York Times said that American farmers have been calling on the Trump administration to quickly find a way to solve the problem of American soybean exports to China, which has caused a huge impact on American soybean farmers this year. Caleb ragland, president of the American Soybean Association and a soybean grower in Kentucky, bluntly said: "The trade war has hurt everyone. Nowadays, soybean growers are facing an increasingly severe financial crisis, and the latest developments are deeply disappointing."

American farmers are harvesting soybeans video screenshot

"China has always remained calm"

Will the trade war between China and the United States break out again? Many analysts believe that the threat of imposing 100% tariffs is a means of pressure from the United States. According to the CNBC website, some traders and investors believe that they should wait and see whether Trump will fulfill his threat. Market strategist Jay Woods said: "The good news is that this may just be a negotiating tactic by the government, and now it is a buying opportunity."

Many media have mentioned that Trump told the White House that night after he threatened tariffs on the morning of the 10th that he could give up his plan to significantly raise tariffs if China revokes the new rules on rare earth.

Singapore's Lianhe Zaobao published an analysis on the 12th that the US's 100% tariff threat is aimed at putting extreme pressure on Beijing. Luo Minghui, associate professor of public policy and global affairs at Nanyang Technological University in Singapore, believes that the US move is aimed at retaliating against Beijing's recent actions through extreme pressure. He said that a meeting between Chinese and US leaders may be held at the end of the month, but because "US-China relations are changing rapidly and the situation may improve or deteriorate in a short period of time, it is difficult to make a judgment now."

The researchers of the Institute of World Economy and Politics of the Chinese Academy of Social Sciences told the Global Times on Monday that after four rounds of talks, China-U.S. economic and trade relations were repeated again. For China, this situation is not surprising. U.S. trade policy and negotiation strategy has always been seen as a tool and tool, rather than genuinely seeking to reach an agreement. Since 2018, the series of policies can be seen that the U.S. side has consistently expected and prepared negotiations as a means of pressure to obtain more favorable codes. In these rounds, China has always remained calm, on the one hand continuing to seek space for positive negotiations, on the other hand, and on the other hand also from tolerating policy changes to the United States. In the process, China has also prepared various tools to respond