Donald Trump has always talked tough about China. He returned to the White House in January gunning for a renewed trade war and demanding that Beijing suppress the illicit fentanyl trade, which kills tens of thousands of Americans each year. What he seems not to have planned for is the response: China is getting tough on Trump.
Earlier this month, Beijing announced that it was tightening export controls on rare-earth metals. These elements are indispensable for manufacturing semiconductors, weapons systems, and other products vital to American national security. China processes 90 percent of rare earths globally. Now some foreign companies that use them in their products may need approval from the Chinese government to export those products to customers.
Beijing began curtailing the export of rare earths to the United States at the height of the trade dispute in April. A worried Trump team prioritized securing supply in its negotiations with China at that time. This month’s move has once again put Washington on the back foot. “I don’t want them to play the rare-earth game with us,” Trump said on Sunday.
A few days after the rare-earths announcement, Beijing struck out against the American shipbuilding industry. In an investigation that concluded in January, Washington determined that China has been engaging in unfair practices to promote its shipbuilders. According to Beijing, five U.S.-linked subsidiaries of a South Korean shipbuilder called Hanwha Ocean cooperated with this U.S. probe. Hanwha is a major investor in American shipbuilding, an industry that Trump seeks to expand. Now China has announced sanctions forbidding Chinese companies and nationals from doing business with Hanwha’s subsidiaries. Losing access to Chinese-made equipment could hamper Hanwha’s plans to expand its U.S. operations.
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These maneuvers succeeded others China made in the spring. In May, Beijing stopped buying U.S. soybeans. The loss hit American farmers, a core Trump constituency, particularly hard; Trump has since promised them a bailout expected to run into the billions of dollars.
Trump and China’s leader, Xi Jinping, are slated to meet at the Asia-Pacific Economic Cooperation summit in South Korea at the end of the month. Chinese leaders may decide to continue dialing up tensions, perhaps even derailing the talks and reigniting the spring’s tit-for-tat tariff war. Trump has already threatened to impose an additional 100 percent tariff on Chinese imports on November 1, in response to Beijing’s rare-earths controls, and the Chinese government has warned that it would retaliate.
Trump and his team seem keen on downplaying the unease between the two countries. U.S. Treasury Secretary Scott Bessent will meet his Chinese counterpart in the coming days in Malaysia, likely to try to relieve it. “Don’t worry about China, it will all be fine!” Trump posted on social media after fears of a renewed trade conflict sparked a sell-off on Wall Street. “Highly respected President Xi just had a bad moment.”
China’s leaders have proved adept at exploiting Trump’s political vulnerabilities by withholding what he wants or needs—making him supplicate for a trade pact, for example, or a fentanyl agreement, or even soybean imports. Trump has managed to extract just one concession from Beijing: a deal to rescue TikTok’s U.S. operation by arranging for American investors to take majority ownership. But even that may not be a done deal, as the Chinese government has not confirmed that Xi has given his consent.
Xi could be using rare-earths restrictions and soybean imports to build up his negotiating leverage—to get Trump to loosen U.S. export controls on advanced AI chips, for example, or pull back support for Taiwan. But the measures also suggest something more sweeping about China’s understanding of its economic might. The new rare-earths restrictions can be deployed not only against the United States, but against any country that dares to oppose Xi’s will. This marks a real shift in Chinese policy—a willingness to use economic power to compel companies around the world to act in Beijing’s interest.
The move could easily backfire. Trading partners could seek to cut China out of global supply chains if they find that access to vital Chinese-made products has become unreliable. But that’s a risk Xi may be willing to take in a world where global economic relations are defined by competition more than by integration. Trump, with his tariffs and his threats, may well discover that what goes around comes around.
