Copyright Bloomberg
China’s trade war tactics aren’t simply about sweeping rare-earth export restrictions or soybeans. They’re a way to test what Washington values most in negotiations, and where Beijing can gain an upper hand. This latest friction has ratcheted up tensions to a new level. Each side is limiting what the other needs in the name of national security: High-end chips and semiconductor technology in the case of the US, critical elements in the case of China. It also comes ahead of an expected meeting between Donald Trump and Xi Jinping at the Asia-Pacific Economic Cooperation summit in South Korea. Beijing won’t want to go into an encounter on the back foot. China’s gamble on rare earths reflects both a strategy to leverage its advantages, but may have also exposed its vulnerabilities.
