On October 23, U.S. Treasury Secretary Bessent said in an interview with reporters that if China does not let go of the restrictions on rare earth exports, the United States will take the software off the knife.
Rare Earth and software, one is underground baby, one is the code on the screen, why do these two things go together?
What does the US want to do, and what will China do?
Speaking of this wind wave, we must also speak of China's rare-earth export controls.
As the absolute main force in the global supply of rare earth, China holds this card in its hands no longer for a day or two.
Rare earth may sound mysterious, but it is actually an indispensable raw material for the manufacture of various high-tech products.
From smartphones to electric cars, from wind turbines to missile-guided systems, these seemingly undesirable metal elements are inseparable.
Once China tightened the valve on rare-earth exports, the global industrial chain began to feel pressure.
Although the United States also has rare earth deposits of its own, the cost of mining and processing is so high that it can't be counted on in the short term.
Faced with China’s rare-earth control, the U.S. government has no intention of sitting down.
Bessent's statement on October 23 was rather tough, claiming that "everything is within the scope of discussion."
This sounds vague and actually reveals a huge amount of information.
The U.S. government is considering imposing software export restrictions on China, especially critical software that drives a variety of products.
The idea is actually horrible.
The modern manufacturing industry relies heavily on various software tools, especially electronic design automation software, which we often call EDA software.
This thing is like a paintbrush for designing chips. Without it, no matter how advanced a chip factory is, it can only stare.
The United States has an absolute technological advantage in this area.Several American companies almost monopolize the global market.
Trump made harsh remarks on social media as early as October 10, threatening to impose a 100% tariff on China and impose stricter export controls on key software.
Basent’s statement is a further confirmation of this threat.
America's logic is simple: You don't let me use rare earth, I don't let you use software, everyone doesn't think better.
The United States does not intend to fight alone this time, but will pull its G7 partners together.
Besson made it clear, The United States will coordinate its actions with its G7 allies to jointly tackle China’s rare earth controls.
This multilateral coordination approach is obviously more deterrent than the unilateral actions of the United States.
There is no shortage on the EU side.
Germany's Handelsblatt reported on October 22 that, The European Commission is considering countermeasures to China’s rare-earth control measures.
European Commission Economic and Productivity Commissioner Dombrovsky has publicly stated that the EU is coordinating this with its international partners.
It seems to be indeed an organized and premeditated collective action.
This tactic of collective pressure has indeed some destructive power.
After all, the share of the G7 countries in the global economy is insignificant, and they are united to put pressure on China, which will indeed have no minor impact.
However, this approach also carries the risk of easily politicizing economic and trade disputes and may eventually lead to further division of global supply chains.
Can America's wishful thinking start?
The latest situation shows that things may not be as simple as the United States thinks.
Just in the last week, a big news came out at the Bay Core Exhibition held in Shenzhen: The Chinese enterprise, a subsidiary of the company, has launched two domestic EDA software with fully independent intellectual property rights.
The meaning of this news is unusual.
EDA software has been a pain point in China's semiconductor industry, and foreign products have long occupied a monopoly position.
The software launched this time, it is said to fill the gap in China's domestic high-end electronic design industrial software technology.
While the specific level of technology and market performance remains to be observed, at least it proves that China has begun to make substantial breakthroughs in this key field.
This moment is tasty.
At the critical moment when the United States threatened to impose software export restrictions on China, Chinese companies came up with self-developed EDA software.
This is more like China's response to the threat from the United States: You want to get stuck in our necks? Then we'll build our own tools.
The U.S. stock markets are very sensitive to this news.
On October 23, the U.S. stock index fell again, and market confidence was significantly impacted.
Investors are clearly worried about the escalation of the Sino-US trade dispute, fearing that the confrontation will further drag down the global economic recovery.
In the long run, the U.S. software restriction strategy could have unexpected consequences.
Historical experience tells us, External pressures often stimulate technological innovation.
At the time, the U.S. imposed a chip ban on China, which in turn promoted the rapid development of China's semiconductor industry.
This time, if the United States really restricts software exports, it is likely to provide greater market space for China’s development of autonomous software.
China is clearly prepared to respond.
In addition to accelerating independent technology research and development, China may also reduce its dependence on American software by strengthening technical cooperation with other countries.
Russia, India, Brazil and other countries also have good technical accumulation in some software fields and can become partners.
Behind this Sino-American science and technology game, it is actually a reflection of the competition between the two great powers for control over the global industrial chain.
The United States wants to maintain its hegemony through technological blockade, while China wants to break this technological monopoly through autonomous innovation.
Both sides are preparing for future competitive advantages.
The US strategy has its logic and its limitations.
The reasonable point is that software is indeed the advantage of the United States, and it is logical to use it to offset China’s rare-earth advantages.
The limitation is that this approach is easy to inspire China to accelerate the pace of independent innovation, and in the long run it may be unpaid.
For the global economy, this practice of mutual sanctions is obviously not good news.
It increases business operating costs, reduces the efficiency of global supply chains, and could ultimately lead to consumers paying higher prices.
From this perspective, Both sides should consider resolving differences through dialogue and negotiation, rather than imposing sanctions on each other.
Source of information:
Ministry of Commerce of the People's Republic of China: Notification No. 61 and 62 on Rare-Earth Export Control on October 9, 2025
· China Government Website: The spokesperson of the Ministry of Commerce answers reporters' questions on rare earth export control policies and measures
· Xinkailai Technology Co., Ltd.: Subsidiary Qiyunfang released two domestic EDA design softwares
· Shenzhen Wanliyan Technology Co., Ltd.: Released 90GHz ultra-high-speed real-time oscilloscope product
U.S. Treasury: Treasury Secretary Bessent receives an interview with Fox Business News Network on October 13
·U.S. Center for Strategic and International Studies: Experts on Key Mineral Issues Analysis of China's Rare Earth Policies
· Reuters: U.S. Trade Representative Greer and Treasury Secretary Bescent went to Malaysia for talks