Financetwitter:
China Suspends Critical Rare Earth Exports To Everyone – Chinese “Peasants” Have Enough Cards To Cripple The U.S.
April 15th, 2025 by financetwitter
Beijing has called U.S. President Donald Trump’s tariff strategy “a joke”, irritating U.S. Treasury Secretary Scott Bessent. Incredibly upset, the clueless and incompetent Bessent has denied it was a joke. At the same time, the arrogant man is desperately pushing for a negotiation, any negotiations, to start between his boss and Chinese President Xi Jinping.
Hilariously though, despite two months of begging Beijing to ask Mr Xi to request for a call from Mr Trump, so that the U.S. president can claim victory and not losing face – and perhaps to also insult the Chinese leader for “kissing Trump’s ass” – the White House was greeted with a 125% tariff in retaliation instead. When Xi openly labelled Trump as a bully, it means phone calls between both leaders are impossible.
If Bessent, and his brilliant colleagues namely Commerce Secretary Howard Lutnick and Trade Advisor Peter Navarro, still think the U.S. can use the same outdated playbook from Trump’s first term some eight years ago to intimidate, blackmail and suppress China, they should go back to school and study about the Chinese 5,000-year civilization.
The problem with American politicians is they always think they’re the smartest species on the planet, so much so US Vice-President JD Vance did not think it was inappropriate to insult the 1.4-billion Chinese people as “peasants”. Trump’s team thought they could bully Xi Jinping, the same way Trump-Vance did to Zelensky during the Ukrainian president’s visit to the White House.
Trump is acting like he holds all the cards with China. But unlike Ukraine, which does not have any cards to play in the war with Russia, China arguably has more cards than the U.S. initially thought in the current trade war. Having made dozens of un-countable U-turns, flip-flopping, backpedalling and whatnot, Donald Trump has been blinking so fast that the bulb might be faulty.
To China’s amusement, after it punched back with 125% tariff and announced it would stop playing the silly game, Trump administration blinked again by exempting its own self-imposed 145% tariffs on Apple iPhones, computers, and other electronic devices. Despite bragging about “Art of the Deal” and mind-boggling secret strategies, it didn’t take much to reveal the U.S.’ Achilles heel.
Even after admitting that the U.S. cannot survive without cheap Made-in-China iPhones, Trump’s bumbling commerce secretary Howard Lutnick signalled that the new exemptions granted to electronic sector might not last long – to save face after the president was mocked and laughed at for yet another humiliating U-turn. After having a good laugh, China begins to strike where it hurts the U.S.
Beijing has now played the rare earth card – suspending exports of a wide range of critical minerals and magnets, which threatens to choke off supplies of components essential to automakers, aerospace manufacturers, semiconductor companies and military contractors around the world. Chinese ports are now prohibited from shipping those commodities, while the Chinese government drafts a new regulatory system.
Yes, it’s not only the U.S. who knows how to prohibit the exports of advanced chips and chipmaking equipment to China. Beijing too knows how to halt the exports of critical minerals vital for making cars, drones, robots and missiles to the U.S. The restrictions on the export of seven heavy rare earth metals include samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium.
Taking a page from Biden playbook, Beijing now requires Chinese companies to secure special licenses to export the minerals. This means U.S. defence contractors are at the mercy of Beijing. America is heavily reliant on rare earth imports from China, which accounted for 70% of U.S. rare earth imports between 2020 and 2023, with Malaysia, Japan and Estonia the other three main suppliers of the U.S.
Yttrium, one of the elements covered by the new rules, is almost exclusively sourced in China, with 93% of Yttrium compounds brought into the U.S. between 2020 and 2023 coming from China. According to the U.S. Geological Survey, the U.S. is 100% import reliant for Yttrium – primarily used in catalysts, ceramics, electronics, lasers, metallurgy and phosphors.
In general, the U.S. was 80% net import reliant in 2024 for the rare metals. Dysprosium and Yttrium are particularly critical to U.S. industry – especially in the tech, electric vehicle, aircraft and defence sectors. This is where China outsmarts the U.S. Instead of only increasing the price through tariffs, which US companies have to pay more, Beijing now bans Washington from purchasing it.
So, even if the U.S. Treasury Secretary Scott Bessent can print U.S. dollar and have the money to buy expensive rare earth, the “Chinese peasants” aren’t selling them. The Chinese are showing that they can cripple or hurt the Americans because they have the leverage to basically cut off not only the world’s biggest military and economic superpower, but also its Western allies.
This is why Trump wanted a mineral deal with Ukraine, as well as taking over of resource-rich Greenland. But even if the U.S. got its hands on the pure rare earths, experts say it would still need to build facilities to process the elements, which could take years. Even if Trump and his team can dig up the minerals, they still have to ship it to Chinese refineries exclusively for the midstream processing.
Until 2023, China produced 99% of the world’s supply of heavy rare earth metals. It also produces 90% of the world’s nearly 200,000 tons a year of rare earth magnets, which are far more powerful than conventional iron magnets. Unlike some Japanese companies that keep rare earth inventories, American companies keep little or no inventory because they do not want to tie up cash in stockpiles of costly materials.
Rare earth elements are crucial for a range of defence technologies, including F-35 fighter jets, Virginia-and Columbia-class submarines, Tomahawk missiles, radar systems, Predator unmanned aerial vehicles, and the Joint Direct Attack Munition (JDAM) series of smart bombs. A F-35 fighter jet contains over 900 pounds of rare earth elements, while an Arleigh Burke-class DDG-51 destroyer requires approximately 5,200 pounds.
If the Chinese peasants wanted to, they could force Vice-President JD Vance to beg China before Boeing could import Chinese minerals to build its planes. He had no idea how the Xi leadership has been preparing the 1.4-billion population for “extreme” scenarios, including the severing of total economic relations – in the event of an invasion of Taiwan or a trade war with the U.S. as we can see today.
Additionally, Xi Jinping has also been trying to harden the Chinese economy over the last ten years to reduce its dependencies on western products so that the country is much more self-sufficient in terms of technology, manufactured goods, food, and energy. Video clips of Mao Zedong and nationalistic films were purposely unleashed to send a message – the Chinese are really capable of suffering.
But can the Americans (especially Trump voters) endure the same way the Chinese did during wartime, during the Great Leap Forward, during the Cultural Revolution and during the Japanese Occupation? Chances are they can’t suffer economic pain based on how quickly Trump reversed the 145% tariff on iPhones, iPad, MacBooks, and computers
What Trump administration can do now is to stockpile deep-sea metals to create large quantities ready and available on U.S. territory to be used in the future, which actually is a breach of international law, which says the seabed and its resources “are the common heritage of mankind”. Still, the U.S. can’t use those “unprocessed” rare earth elements.
Weaponizing rare earth is just one of many cards China can play in the tariff war. Beijing has also ordered its airlines not to take deliveries of Boeing jets, as well as halting purchases of aircraft-related equipment and parts from American companies. It has already – secretly and carefully – dumping U.S. bonds and devaluing Yuan. However, rare earth remains one of the most powerful cards to play.
