Transcription
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The US China trade war is literally spiraling out of control. It is getting out of control by the day. With the recent announcement of expert restrictions on rare earth minerals, which I discussed here on my channel a couple of days ago in great detail, China effectively said, "Look, enough is enough." China's move hit Washington where it hurts the most. It pointed to its vulnerability in waging wars. Since Chinese rare earth imports account for nearly 78% of United States military industrial manufacturing, rare earth magnets are crucial components in US weapon systems such as F-35, fighter jets, and even tomahawk missiles. China is the leader in processing rare earth minerals, which is key here. processing is key. The United States is at least at least a decade and trillions of dollars behind China in this regard. China controls nearly 70% of the world's rare earth mining and 90% of processing. So, as you can see, the United States has no cards, zero cards, as uh Trump likes to say. I discussed this in great detail in a recent video and I explain how the expert controls impact the United States military-industrial complex. So, you're welcome to watch that video next.
With the Trump Xi Jinping meeting coming up in South Korea later this month, Washington is in a panic mode, a fullblown panic mode. And uh what does it do when it panics? Well, Treasury Secretary Bessant and President Trump have been busy this week doing some domestic damage control trying to persuade you, the American public, that the United States wants to help China. So, both of them said the United States want to help China, but China's not allowing us to help it. >> As the president said, we want to help China, not hurt it. Um, and then they of course say that China is the one that refuses to cooperate even though Washington has been nothing but aggressive toward China in recent months. Besson said this is China versus the world. Those are his words. China will get hurt. In reality, it is China versus the West. However, as I'm sure you would agree and if you know simple geography, the West does not represent the entire world.
Now, take a look at the video. This is Scott Bessant uh explaining what his policy decisions are. Take a look. >> If some in the Chinese government want to slow down the global economy through disappointing actions and through economic coercion, the Chinese economy will be hurt the most. And make no mistake, this is China versus the world. They have put these unacceptable export controls on the entire world. China is a command and control economy and we and our allies will neither be commanded nor controlled. They are a state economy and we are not going to let a group of bureaucrats in Beijing try to manage the global supply chains. China's actions have once again demonstrated the risk of being dependent on them on rare earth and for that matter anything. If China wants to be an unreliable partner to the world, then the world will have to decouple. The world does not want to decouple, we want to derisk. But signals like this are signs of decoupling which we don't believe China wants. And again, we do not want to decouple. We should work together to derisk and diversify our supply chains away from China as quickly as possible.
Besson pointed to Washington now seeking global backing against China's rare earth export curbs. Scott Besson expects support from India and European Union. The United States wants to, let's say, decouple the EU from China as a way to solidify its presence on the European market and uh really to probably show Europe who's boss. Of course, Europe already knows that and everybody sees it. Europe of course lacks the independent and sovereign policy makers with the exception of maybe a couple of states such as Hungary for example. So getting Europeans on board with shifting away from Chinese exports appears to be an important part in Besson's message this week.
Beijing's new rules announced on October the 9th require both Chinese and foreign companies to obtain government approval to export any product that contains more than 0.1% rare earth elements by value. The new curves also expand the list of restricted minerals and ban exports for foreign military use, which is a smart move. The restrictions would impact every sector of the United States economy. But uh the defense semiconductor and electric vehicle industries would face the brunt. Defense contractors and Apple, Nvidia, Intel, Tesla, Ford and GM are all highly exposed to this. Beijing said that the expert controls are driven by its national security interest and quote frequent military conflict. In terms of national security reasoning, this is precisely this is precisely what the United States quotes when imposing export control restrictions on advanced microchips to China. So when we do it, it's America first policy. But when China does it, it's wrong. Somehow it becomes wrong to do that to serve your own national interests.
Well, Bessant went as far as to say that China's move is a sign of weakness. In what world? China just showed a card that Washington can't beat. And you don't really need to be pro-China or anti-US to see this. If anything, this is a red flag. This is a wakeup call for Washington. Aggression simply no longer works. The global majority isn't willing to put up with it anymore. Remember, China called on Washington to treat bilateral talks with respect. months ago. This was months ago. This was a specific request and clearly Washington wasn't listening.
Still, the upcoming meeting between Donald Trump and Xi Jinping will be an interesting one to say the least. The good thing is that Washington Beijing lines of communication remain open. Ahead of the South Korea summit, the United States and uh and China, the officials from both sides are actually holding staff level talks in Washington during the IMF and World Bank meetings this week. And after that, Bassant and Helifang, Chinese vice premere, are expected to meet in Asia at the Asia-Pacific Economic Cooperation Summit in Seoul. So, it is clear that Washington desperately needs an offramp here. It needs deescalation because it cannot do without rare earth minerals. It can't wage a war in China when China controls rare earth minerals that are needed for the military-industrial complex in the United States. And so perhaps that's why Washington is resorting to all means possible to escalate to flex some muscle. Trump has responded to China's move with 100% tariffs on Chinese goods starting on November the 1st. Additionally, recently the Trump administration proposed to ban Chinese airliners from Russian aerospace which remains a key route connecting Asia with Europe and North America.
So definitely a lot is on the table and I will keep you updated. Uh there's a lot to discuss and many different moving parts. I will start discussing some of these events and uh their analysis over on my Substack more often. So be sure to subscribe. Thanks so much for joining me today. Thank you for watching. I hope that you consider supporting my work. Become a subscriber here on YouTube, on Substack, and Patreon. I would love to see you on my alternative platforms. You will find them linked below. Have a wonderful rest of your day. Bye for now.