The contents of this article are written with authoritative materials and personal opinions. The source of the literature has been marked at the end of the article, so please know.
Preliminary
Under the pressure of rare earth control, the United States really couldn't hold on again.
A few days ago, U.S. Treasury Secretary Bescent announced the negotiation list, in which the core figures of China's hardliners disappeared, leaving only two of Trump's "troika".
Even so, Trump is still playing hard on his mouth, rumoring that tariffs on China are no longer 100%, and that the price will immediately rise to 155%.
However, Besent's words have inadvertently exposed that the United States has few "trump cards" and may soon have to compromise again like it did in May.
On the 24th, the fifth round of China-US negotiations has been fully launched in Malaysia.
This negotiation is crucial.
As the end of the tariff "customs ceasefire" in November is approaching, U.S. Treasury Secretary Besson just released the "grim speech" in the previous period:
If China claims to deregulate, the United States will agree to continue to extend the agreement between China and the United States.
This is also equivalent to suggesting that if the negotiations fail, the United States may no longer comply with the results of previous round Sino-US talks.
However, some foreign media believe that Bescent is just bluffing. The "truce" is mutually beneficial to both sides, not a preferential condition unilaterally given to China by the United States, so naturally there is no cancellation.
Although the Trump administration says so in mouth, its actions are honest.
On the 23rd, the U.S. official announced the lineup for China-US-Malaysia negotiations. This time, only U.S. Treasury Secretary Lutnik and U.S. Trade Representative Greer were on the list.
In the previous rounds of negotiations, U.S. Commerce Secretary Lutnik, who has been a “core figure”, has disappeared.
Lutnik, one of the main drivers of the hardships against China, advocated the imposition of "heavy taxes" on China at the time of acceptance of the nomination and strongly supported all Trump's tariff claims against China.
As the head of the business department, he not only participated in the "trade war" between China and the United States this year, but also gave Trump many ideas, which played a greater role than the Ministry of Finance.
The fact that Lutnick disappeared from the list also appears to confirm a “hole news” disclosed by U.S. media last week:
There was a heated row at a policy meeting within the White House. Trump scolded Lutnik for being "stupid" and said that he had messed up Sino-US trade and would never be influenced by Lutnik in the future.
Although the White House did not respond to the news at the time, Republicans also said it was a "rumor" of catching the wind and trying to incite discord in Trump's cabinet.
But this time, Lutnik was actually removed from negotiation, which greatly increased the credibility of the news.
At the time of the list's announcement, US President Trump suddenly appeared and announced that he would impose a 155 percent tariff on China, further increasing the "100%" tariff previously threatened, the time remains unchanged on November 1.
In fact, this is also Trump's old routine. Before each negotiation, you have to fabricate some chips to add cards to yourself.
For example, the last time it was about to start negotiations, Trump suddenly said "because China bought Russian oil, ready to impose tariffs", created a code.
It can be imagined that these codes have no effect, and Bessent himself later admitted that China has almost no talk about buying oil regardless of the "new rules" formulated by the US.
Therefore, no matter whether Trump "shouts" the tariff to 100% or 155%, or even says that the truce agreement will not be extended back to May, it has no practical significance.
The president has always changed his words day and night, and he is likely to change his mind again before November 1st.
What's more, a few days ago, in order to stabilize the US market, Trump promised in front of reporters that "high tariffs on China are unsustainable", and also raised rare earths, fentanyl and soybeans with China as negotiation targets.
It is not difficult to see that the United States is doing everything possible to pretend that it has a "trump card" in its hand and is ready to gain a dominant position before negotiations.
Earlier this week, U.S. Treasury Secretary Bessent even threatened directly that “the U.S. could take engine controls on China, as well as software-driven controls.”
He vowed that once the United States did this, it would have the ability to pull allies together to do so.
Before the negotiations began, Bessent reiterated that “everything we have done is to prevent China’s escalation of rare-earth controls.”
This sentence inadvertently revealed that the United States is really "afraid" of China's rare earth control now, and they know very well what will happen if it is dragged on.
So the most crucial goal of this Malaysian Kuala Lumpur talks is to "conflict" China's rare earth control, so that the United States can use all means to the goal.
When it comes to which chip is bigger, Bescent or China, everything is in front of us:
What the United States calls engine control and software-driven control. Although there is no better substitute in China at present, there are similar products with similar performance in foreign markets.
Furthermore, software and vulnerabilities such as intellectual property are very difficult to control, even if the West ban exports, the impact is very limited.
Not to mention the engine between China and the United States. The United States 'suspension of supply will at most extend the production cycle of China's aircraft, but it faces liability for breach of contract, which will affect the future trade between China and the United States.
Furthermore, China's process engine research and development and production are also getting faster and faster, and the future will soon not rely on U.S. supplies.
Rare earths are completely different. After this round of control by China, Western countries gathered for meetings.
As a result of the meeting, in addition to shouting slogans to "get rid of dependence on key minerals and build our own rare earth supply chain," the only consensus was to quickly let China resume exports.
They want to build a so-called “flexible supply chain” that foreign media estimates may take five, ten or even more years.
U.S. President Donald Trump has just signed an agreement with Australian Prime Minister Albany to supply rare earth, and the two countries have agreed to invest $8.5 billion in money to “break” the supply chain of rare earth.
However, the Australian media themselves also said that this is an investment that does not see any prospects. They now have no technology or advanced equipment other than rare earths, and can only start from scratch.
It's no wonder that the U.S. Treasury Secretary has to solve the rare earth problem as soon as possible, and the German Foreign Minister has to rush to visit China. The West is already overwhelmed by this.
From this perspective, the purpose of China's current round of rare earth control has been achieved, and the two "cards" of the United States 'software and engine are simply not enough.
Bloomberg also sent bad news on the 24th:
In the hands of China, in fact, there is also a "royal card" that has never been played, that is, the control of U.S. pharmaceutical raw materials, has penetrated into every industrial chain in the United States.
As a global drug producer, once China decides to “confess” to the United States, they face far greater risks than those of rare-earth products.
It is not difficult to see from these reports that China’s negotiation skills have always kept the code in hand.
In this way, there is no need to be afraid of even Trump's threat of high tariffs. According to past experience, there will be no backup plan after the "three axes" of negotiations are used up.
reference
China has another “nuclear option” – the drug raw materials observer network
China-US trade talks start today in Malaysia! detailed details announced
What to Talk About in China - China Daily News