On the evening of October 12, the Chinese Ministry of Commerce rarely responded to Trump's tariffs on China on the weekend, saying clearly: "not willing to strike, but not afraid to strike."In the previous 48 hours, U.S. Vice President Wans and Trade Representative Grill have been intensely "fire extinguishing", respectively said "Trump is willing to communicate rationally" "no plans to fight a trade war."
Just two days ago, Trump angrily sent a thousand-word article, announcing that from November 1st, an additional 100% tariff would be imposed on all Chinese imports on the basis of existing tariffs. On that day, U.S. stocks plummeted, and the market value evaporated by $1.65 trillion in one day. But just before the market sentiment has stabilized, the White House quickly began to "end in steps": first, Greer softened his tone on Fox News overnight, and the next day, Vance once again said that "Trump cherishes relations with China" and publicly set aside a "window of several weeks" for negotiations.
The familiar scenario of the “President’s shouting, shut-off” came out again.But this time, China not only did not panic, nor accompanied, but played a set of “combined counter-points” that exceeded expectations: rare-earth all-chain export control, Qualcomm’s anti-monopoly launch, and U.S. ships charged port charges.At a time, Washington originally played a tough gesture to the market and its allies, and was precisely hit by Beijing’s “We have a card in our hands.”
China does not accompany the show and directly hits the core of the American industry.
The Chinese side in this round of countermeasures, showing the characteristics of significant systematization and policy upgrading, is not a symmetrical retaliation in the traditional sense, but a joint strike of "rules + industry + nodes".
The first is the comprehensive upgrade of the rare earth export licensing system. China does not directly embargo, but through the establishment of a "end-use review" mechanism, incorporates rare earth export licenses into the reciprocal security assessment framework. This logic actually engraves the U.S. principle of export censorship of high-end chips and DUV equipment to China. The difference is that chips can be blocked by Japan and the Netherlands, while rare earth-based commodities are difficult to replace.
This mechanism substantially controls the upstream of global high-end magnets, military-industrial materials, and hybrid components – and the United States is highly dependent on China in these areas. According to the U.S. Geological Survey, about 63% of U.S. rare earth imports in 2024 come from China.
The second step is to launch an antitrust investigation into Qualcomm. The Chinese regulatory agency's move directly refers to its "patent binding + market monopoly" model, Qualcomm in China is both a communications patent license big company and a core supplier of chips. Once the antitrust is launched, not only directly affects its profit structure, but also may push the home-made alternative window. The Trump administration wants to hit the "China science and technology gate", as a result of which its own enterprises are first pressed by Chinese regulation to suspend the key.
The third measure is to impose port surcharges on American ships. This is a direct response to the US's earlier "differentiated treatment of Chinese-funded ships." China has not generalized the scope of countermeasures, but accurately identifies ship registration information and countermeasures according to the same standards of the United States. This is both legally feasible and economically accurate. The key is that this policy itself does not affect global logistics stability, but only allows US capital to bear the cost spillover of previous policies.
Under the three-step combination, the Trump administration's "tax increase negotiation show" has been forced to face a problem: China has changed from a responder to a party that proactively sets negotiation conditions.
“Fake news” has been revealed.
From the reaction of the financial market, Trump's "100% tariff" statement has not turned into long-term risk in the eyes of capital.After the fall of the 10th, the U.S. stock market in Greer said that night stopped falling and rebounded, and the market no longer sees Trump's remarks as a real policy signal, but rather as a temporary "price bottom".
Goldman Sachs and Morgan Stanley have already clearly defined Trump's statement model as the "TACO cycle" in their research reports-Trump Always Chickens Out. This means that he created a bargaining advantage by shouting punitive measures in several rounds of negotiations, but almost without exception, he chose to cool down, stay on the eve of the agreement, and reach a deal.
The first phase of China-U.S. trade agreement in 2020 is so.After announcing tariff increases on hundreds of billions of dollars worth of goods, it eventually reached a compromise to partially withdraw tariffs in exchange for procurement commitments.In the spring of 2023, the U.S. also announced tariffs on some Chinese goods to 145%, eventually reduced to 30% within 30 days and announced a "suspension of further escalation".
Therefore, after the announcement of the 100% tariff this time, despite the violent reaction of the market, investment banks and asset management institutions quickly returned to rational judgment-Trump had no intention to make this a protracted war. His core goal is to create a "tougher America" negotiation atmosphere for the upcoming APEC South Korea Summit.
It is worth noting that Trump chose to set the effective date of the tariffs on November 1, which happened to be the day after the APEC meeting in South Korea ended. This shows that the so-called "100% additional levy" policy is essentially a revocable negotiation tool, rather than a strategic choice for the White House to really "disconnect" from China's economy.
Trump lifts the table, Greer hands the message
The policy swings are so violent that the echelon performance of the US side is no longer concealed.
Trump himself focuses on "black face": strong language, timeline oppression, cancellation of talks, and threats of trade war. This kind of operation is very useful for him to "show toughness" to the Republican grassroots and helps him maintain his "anti-China strongman" identity among conservatives.
Greer served as a "pressure regulator": Just a few hours after Trump issued the article, he went on television to publicly "clarify" that he did not intend to really fight a trade war, hoped to establish a balanced relationship, and emphasized that dialogue could still be carried out. This kind of statement is not only a consolation to the capital market, but also a "negotiation ladder" offered by China.
Vice President Wans is a “liberating stepper of goodwill”: he said in an interview on the 12th that the calming signal repeatedly cited by foreign media: “We have a lot of cards in our hands, but we hope we don’t have to use them.” at the same time stressed that “Trump very cherishes the relationship with China.”
The three people cooperated, the pace was not chaotic, but the functions of the departments. only this time, the Chinese side was not caught up in the previous "following each other's rhythm" strategy, but through the method of qualitative, limiting, determining, the rules of the game from the "fighting mouth" pulled back the "system".
Negotiating power is being restructured.
This short-cycle game of “tariff threats – counter-escalation – policy decomposition” appears to be an old-fashioned boost, but reflects a clear reality behind it: the Sino-U.S. negotiating power base is being rebuilt.
First of all, China is no longer a passive counterattack. From rare earth review to anti-monopoly launch, to port taxes and fees, every attack by China is based on "rule legitimacy + systematic response", and the attack point is highly aimed at the three core lifelines of U.S. military industry, technology, and capital. This style of play is far more strategic than the tariffs on soybeans and chemicals imposed in 2018.
Secondly, the "tax threat" of the United States is becoming increasingly difficult to push substantial concessions from China. The reason is that China has eased its dependence on high technology, capital and resources through industrial upgrading, market replacement, and institutional countermeasures.
Third, the market no longer believes that "Trump can decide the outcome." The conditioned reflex of U.S. stocks suggests that Wall Street has "quantified" Trump's speech model as trading signals rather than policy signals. This poses a great constraint on the U.S. negotiation strategy: once the market determines that you will retreat, the pressure will flow back to you.
Finally, Trump's most important "nuclear bomb"-export controls on high-end chips and high-tech products-cannot replace China's rare earths and manufacturing capabilities in the short term. In the rare earth sector, the United States itself has not even established a high-purity magnetic material smelting line, let alone a complete supply chain, which will take at least more than 10 years. The reason why China is confident is precisely because this is a game in which both sides know "who suffers more".
This round of Trump’s “100% tariff tactical show” was played in less than two days and was burned by the White House itself overnight. In the past, the “price raise, finish again, force China to make concessions” scenario has been difficult to dominate the situation. China is no longer a voice speaker, but a creator of double restrictions on rules and rhythm.
Before and after the APEC summit, whether China and the United States will have "face-to-face contact" is not important. The real signal is: China is no longer obsessed with the talks themselves, but is-when the cards on the table change, who will hold the cards.
The world may still see Trump continue to "speak", but markets, opponents and allies have already had a new valuation of the empty chair he left at the negotiating table.