Preliminary

Trump's pressure on China was extinguished in less than a day!

On the morning of October 10, Trump also waved a 100% tariff bar on China, rumored to cancel the APEC meeting, and the global barrier awaited a trade storm, but only eight hours later at the White House press conference, he turned 180 degrees, claiming to look forward to meeting with China.

Why did Trump suddenly change his face? How will China respond?

The drama tornado.

That storm came quickly and went faster.

On the morning of October 10, Trump was also swinging a big stick on social media, and the lines were filled with a smell of fire, he spoke to not only consider imposing tariffs of up to 100% on Chinese goods, but even the upcoming APEC summit between the two countries could be cancelled, the whole world felt this coldness, as if an unprecedented trade conflict was about to erupt on November 1.

However, no one expected that the plot reversal would be so caught off guard.

Less than eight hours later, at the White House press conference that afternoon, Trump's attitude made a 180-degree U-turn in face of the same group of reporters.

He made the morning tough, openly emphasized the relationship with China is quite good, and is very looking forward to meeting at the summit, this speech stunned observers who were still analyzing the situation in the morning, it is not a simple tactical adjustment, but rather a carefully planned limit pressure.

What happened behind this day-long tragedy? the answer lies in the three structural cracks that have long existed in the U.S. system, which have been torn apart by China.

High-tech Achilles’ foot.

The initial calculator of the US side was loud and wanted to use traditional tools such as tariffs to bomb China's huge manufacturing industry.

They thought this was their home court, but they didn't expect that China had no intention of entangling on the same dimension. Just the day before the United States escalated its threat, on October 9, China's Ministry of Commerce quietly issued an announcement to control the export of rare earths related items.

The regulations are very specific: as long as the rare earth content in commodities exceeds 0.1%, an export license must be applied for.

This trick is really too harsh, it is simply a sharp surgical knife, rare earth, this word sounds a bit strange, but it is the fate of the U.S. high-tech and defense industry.

Take the US military's proud F-35 fighter jet for example. Its core components such as engines and radars are inseparable from rare earths. Each F-35 consumes about 417 kilograms of rare earth materials.

According to the internal assessment of the United States, once the supply of rare earths from China is cut off, the F-35 production line they are proud of can only last for 18 months at most. This is no longer a trade issue. It directly touches the national defense security red line of the United States, and the phone calls of those military giants must have reached the White House at the first time.

What's more, this dependence is not limited to the military field. Looking at the civilian market, whether it is the batteries of new energy vehicles such as Tesla and General Motors, or the manufacturing of cutting-edge chips, there is a rigid demand for rare earths, which is related to the future of the United States. Position in the global science and technology competition.

China's weight at this poker table is overwhelming. About 70% of the world's rare earth mining and up to 90% of refining and processing are completed in China. This absolute advantage means that the United States can't find an alternative at all in the short term.

When your industrial vitality is firmly held in the hands of others, the harsh gesture can only be a false voice.

Voting in the capital markets

If rare-earth counter-terrorism is a hole for a particular industry, then the financial markets’ reaction and fear of inflation are like a puddle on the global U.S. economy, a pressure that comes more directly and makes it harder for the White House to ignore.

The Nasdaq index plummeted on the same day, falling more than 3.5% in a single day. Technology stocks became the hardest hit. Wall Street elites obviously had extremely pessimistic expectations about the consequences of decoupling the Sino-US supply chain. This kind of panic spread rapidly like a virus.

The real-economy warning also followed, with the U.S. Chamber of Commerce publicly warning that a 100% tariff could affect two million domestic jobs, and the U.S. had previously planned to impose a high port stop fee of $150 per net-ton on Chinese ships, which would undoubtedly exacerbate the already tense supply chain cost.

All this will eventually be transmitted to the ordinary people, to know, at the time the U.S. CPI data has been ongoing at more than 3% highs, inflation pressure is huge, any policy of further pushing higher prices, are no different than playing fire on the cannabis barrels, the increase in costs will ultimately only be paid by U.S. consumers.

China's countermeasures are equally precise. After the US threatened to charge high port fees, China immediately announced that it would take reciprocal port fee countermeasures. This countermeasure was originally scheduled to take effect on October 14th.

On October 10, the U.S. Trade Representative’s Office quietly amended the rules, not only significantly reducing the original planned $150 standard to $46 per net ton, but also adding exemptions specifically for long-term lease agreements for transporting natural gas and liquefied oil gas.

This tactical retreat clearly shows that the pressure valve from within the economy is almost out of control.

The backyard fire in the hinterland of the ticket warehouse

Economic pain will eventually turn into a political crisis, especially in the context of electoral politics. China obviously understands this well. Their other heavy blow accurately hit Trump's most solid political fundamentals-agricultural states.

Soya, this seemingly ordinary crop, is now the most destructive political weapon.

China is the largest buyer of U.S. soybeans, this identity has given tremendous influence, and the immediate effect appeared after China's drastic reduction or even suspension of procurement, data showing that just between September and October, U.S. soybeans exports to China decreased dramatically by 62%.

Behind this figure is the collective anxiety of key agricultural farmers in Iowa, Illinois and other states, where the mountains of soybeans can’t be sold in the warehouses, and the prices can be imagined to crash, with countless emails filled with anger and despair, and anxious phone calls flowing like a tide into the offices of the White House and congressmen.

These farmers are Trump's most loyal supporters and his ticket warehouse. Their interests have been damaged, which directly shakes the political foundation of the Republican Party in these areas.

This is an unbearable political risk for any president looking to be re-elected, with the irony of the Trump administration initially swallowing tariff bars, one of which was to force China to buy more soybeans, resulting in the opponent’s army and its own backyard being set on fire.

When cracks begin to appear in the foundations that support your power, any external tough stance will become meaningless.

conclusion

From the extreme pressure in the morning to the pragmatic retreat in the afternoon, Trump’s day-to-day turn is by no means a coincidence, it clearly reveals the fact that unilateral pressure is no longer effective in the presence of its own obvious structural weaknesses.

The rare earth exposed the fragility of the industrial lifeline, the stock market and inflation ringed the alarm clock for economic stability, while soybeans ignited the crisis of the political basic disk, which together led to a rapid shutdown.

China's counter-strategies also showed unprecedented maturity in this game: coolness, accuracy, and tricks are all in each other's pain.

This storm indicates that the game between major powers has already entered a new stage.

It is no longer a simple force collision, but a final test of each other's internal pressure capacity, the level of policy refinement and strategic patience, and if any party wants to solve the problem with a loud voice and a tough fist, it is likely to find that their fist is finally hit on themselves.