What's happened
On October 10-13, 2025, China imposed broad export controls on rare earth minerals, prompting US President Trump to threaten doubling tariffs on Chinese imports to 100% and impose export controls on critical software. China condemned US measures as hostile and damaging to trade talks. Both sides risk derailing a fragile trade truce ahead of a planned summit between Trump and Xi Jinping.
What's behind the headline?
Strategic Leverage Over Rare Earths
China's recent export controls on rare earth minerals represent a calculated escalation in the trade war, leveraging its near-monopoly on these critical materials essential for electronics, military hardware, and renewable energy technologies. By broadening restrictions to include products containing even trace amounts of Chinese rare earths and requiring government approval for exports, Beijing is signaling its readiness to use economic tools as strategic weapons.
US Response and Risks
President Trump's threat to double tariffs to 100% and impose sweeping export controls on critical software underscores Washington's intent to counter China's moves aggressively. However, this risks a spiral of retaliation that could severely disrupt global supply chains, increase costs for manufacturers worldwide, and exacerbate economic pressures on both nations.
Diplomatic Implications
The timing threatens to derail a planned summit between Trump and Xi Jinping at the Asia-Pacific Economic Cooperation forum, the first in-person meeting in six years. Both sides publicly express willingness to negotiate, but mutual accusations of violating the trade truce's spirit reveal deep mistrust.
Economic and Global Impact
Markets have already reacted negatively, with significant selloffs in US stocks and declines in commodities. The dispute threatens to accelerate decoupling between the world's two largest economies, impacting global trade flows and technological development.
Forecast
Unless both sides engage in substantive dialogue and clarify the scope of export controls and tariffs, the trade war will intensify. The US will likely continue to tighten export controls on technology, while China may expand its rare earth restrictions. This standoff will have lasting effects on global supply chains, national security considerations, and international economic stability.
What the papers say
The Japan Times highlights the escalating tit-for-tat between Washington and Beijing, noting Trump's surprise at China's "very hostile" export controls and the risk of renewed tariffs reaching 145%, which could deepen economic decoupling. AP News emphasizes the surprise element of China's move and Trump's conciliatory tone on Truth Social, quoting China urging the US to "correct its erroneous practices." Politico quotes China's Commerce Ministry calling US tariff threats "not the right way to engage" and warning of retaliation. Al Jazeera details China's broad export controls and their impact on global manufacturers, noting Taiwan's semiconductor industry expects minimal disruption. The Independent provides extensive context on China's export licensing and military applications of rare earths, underscoring the strategic nature of the dispute. South China Morning Post offers insight into China's framing of US measures as "provocative and damaging," and the broader geopolitical tensions, including sanctions and port fees. Bloomberg and SBS report on Trump's tariff announcement and the potential cancellation of the Trump-Xi summit, highlighting the high stakes of the confrontation. Together, these sources reveal a complex, multi-layered conflict with economic, strategic, and diplomatic dimensions, underscoring the fragility of US-China relations and the global ramifications of their trade war.
How we got here
The US-China trade war began with tit-for-tat tariffs and export restrictions, peaking in April 2025 with tariffs exceeding 100%. A fragile truce was established in May to reduce tariffs and resume talks. Rare earth minerals, critical for technology and defense, have become a key point of contention, with China dominating global supply and the US seeking to secure access amid national security concerns.
Go deeper
- What are rare earth minerals and why are they important?
- How could these trade tensions affect global markets?
- What are the chances of a US-China trade deal before the summit?
Common question
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Why Are US and China Trade Talks Breaking Down Now?
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More on these topics
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Donald John Trump is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021.
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China, officially the People's Republic of China, is a country in East Asia. It is the world's most populous country, with a population of around 1.4 billion in 2019.
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Xi Jinping is a Chinese politician serving as the general secretary of the Communist Party of China, president of the People's Republic of China, and chairman of the Central Military Commission.
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The United States of America, commonly known as the United States or America, is a country mostly located in central North America, between Canada and Mexico.