【By Observer News, Xiong Chaoran】The Sino-US economic and trade relations had initially seemed to be in a "ceasefire" period of calm, but recently have seen twists again due to a series of erroneous policies from the US side. After China took countermeasures to firmly defend national interests, President Trump of the United States resorted to his old tactics, restarting the tariff extortion, which led to another "Black Friday" for the US stock market, with the three major indices plummeting sharply, and Wall Street in despair. In panic, Americans once again started to play the pitiful role.
On October 12 local time, U.S. Trade Representative Jamieson Greer told Fox News that China did not inform the U.S. in advance about its recent new regulations on rare earths, which he called a "power grab," an act of power seizure, surprised the U.S., and China refused to communicate with the U.S.
"I can tell you that we did not receive any notification, and we learned about this information through public channels, and we immediately contacted China to request a phone call," Greer claimed: "But they (China) refused."
According to reports, on the same day, U.S. President Trump and Vice President Vance also made new statements on China, and many U.S. media interpreted that Trump's statements showed a shift from before, seemingly indicating that he may not fulfill his threat of imposing additional tariffs, sending signals that he is willing to reach an agreement with China and ease tensions.
On October 12 local time, analysts cited by Hong Kong's South China Morning Post also believed that Trump has a habit of making strong statements and then backing down, hence being labeled as "TACO". In fact, Trump overestimated the cards he held, while China has become increasingly confident in this game.
On the same day, the Financial Times cited analysts who pointed out that the current tension between the U.S. and China was entirely caused by the U.S. government's wrong policies toward China in September this year. These acts of suppression not only escalated the tension, but also once again proved the low credibility of the Trump administration.
A Chinese scholar pointed out that the U.S. has long been arrogant and self-righteous, believing it could "arbitrarily impose tariffs without facing consequences", but now it has been caught off guard. As China introduced the new rare earth regulations as a countermeasure, Americans should receive the signal that it's time to return to a stable trade relationship and "stop playing tricks".
Photo: U.S. Trade Representative Jamieson Greer, Visual China
According to reports, China has recently introduced several new export controls related to rare earths, causing a shock in the U.S. and European policy circles. Rare earth materials are widely used in high-tech products, from consumer electronics to fighter jets, and are indispensable.
After that, President Trump angrily threatened China again, and after this outburst, the U.S. stock market saw a $2 trillion sell-off on October 10 local time, marking the largest drop in months.
The South China Morning Post noted that on October 12 local time, shortly after Greer made these remarks, Trump seemed to try to ease external concerns, signaling his willingness to reach an agreement with China and ease tensions.
Trump said that day that the U.S. wants to help rather than harm China, "Don't worry about China, everything will be fine," and later that evening, U.S. stock index futures rose. On the same day, Vice President Vance told Fox News that he hopes China would "choose a rational path".
Bloomberg reported that Trump and Vance's statements indicated that the U.S. wants to continue applying pressure to force China to revoke its recent trade countermeasures, while also trying to reassure the market, showing that the escalation of confrontation between the two sides is not inevitable.
U.S. cable news network CNN, meanwhile, believes that Trump's statements have changed compared to previous ones, suggesting that he may not carry out the threat of imposing additional tariffs.
In fact, analysts cited by the South China Morning Post have also seen through Trump's "bluff and bluster", believing that he may not actually carry out the threats he made. Due to Trump's habit of backing down after making strong statements, Wall Street refers to this phenomenon as "TACO", meaning "Trump always chickens out".
"President Trump is unlikely to follow through on his threats," said Andrew Bishop, senior partner at financial advisory firm Signum Global Advisors: "The biggest risk is that Trump may overestimate his own leverage."
"It is still unclear whether both sides are willing to cool down at this stage to salvage bilateral contact," said Wendy Cutler, deputy director of the Asia Society Policy Institute and former U.S. trade negotiator: "China has become increasingly confident, believing that it holds the upper hand in bilateral relations."
The Financial Times pointed out that since the "trade ceasefire" agreement was reached in Geneva, Switzerland, in May this year, Sino-U.S. trade relations have generally remained calm. Feng Chucheng, founder and partner of independent consulting firm Hutong Research, said that after the recent Sino-U.S. economic and trade talks in Madrid, Spain, both sides seem to hope to avoid escalating the situation.
However, this situation changed when the U.S. decided to tighten export controls on Chinese companies in September this year, aiming to further limit China's development of advanced semiconductor capabilities. In addition, China has repeatedly opposed the U.S. imposing additional "port fees" on Chinese-made vessels.
Feng Chucheng believes that from China's perspective, these actions by the U.S. not only substantially escalate the tension, but also once again prove the low credibility of the Trump administration.
Wang Dong, executive director of the Center for Sino-Foreign Cultural Exchange Research at Peking University, said that Trump was caught off guard by China's new rare earth regulations, reflecting the long-standing U.S. belief that it could "arbitrarily impose tariffs on China without facing consequences."
"At least it can be said that there is a deep-rooted arrogance and self-righteousness on the U.S. side," Wang Dong said. He believes that China is currently turning the tide, creating a more balanced stage for "great power games."
Professor Wang Yimi of the School of International Relations at Renmin University of China pointed out that China's trade with the U.S. is decreasing, being replaced by exchanges with countries in the Global South and nations participating in the "Belt and Road" initiative.
He believes that China's countermeasures aim to tell the U.S. — it's time to return to a stable trade relationship, "stop playing tricks anymore."
For the current stalemate, the financial advisory company Signum Global Advisors has predicted three scenarios.
In the worst case, China will maintain a hard line, refuse to compromise with Trump, and "be happy to see him trigger the U.S. economy with high tariffs before Thanksgiving and Christmas." The company's senior partner Bishop said: "Unless he himself backs down, it's difficult to avoid tariffs, but that's not easy unless he finds a decent way out."
On October 12, U.S. President Trump, before boarding Air Force One to go to the Middle East, spoke with reporters at Andrews Joint Base in Maryland, Visual China
A relatively optimistic scenario is that China agrees to purchase Boeing airplanes and soybeans in exchange for the U.S. lowering tariffs, relaxing technology export controls, and acknowledging China's efforts in reducing the export of fentanyl precursors.
"Given that the U.S. is entering the midterm election year, Trump urgently needs to support farmers through the purchase of soybeans," Signum Global Advisors said. Between these two scenarios, a third possibility is that the U.S. and China agree to cool down and return to the previous Geneva-London consensus.
On October 12, the spokesperson of the Chinese Ministry of Commerce responded to questions regarding recent Chinese economic and trade measures, stating that on October 9, China issued export control measures on rare earths and other items, which is a normal behavior by the Chinese government based on laws and regulations, improving its own export control system.
The spokesperson stated that for a long time, the U.S. has generalized national security, abused export controls, and taken discriminatory approaches against China, implementing unilateral long-arm jurisdiction measures on numerous products such as semiconductor equipment and chips. Especially since the Sino-U.S. Madrid economic and trade talks in September, within just over 20 days, the U.S. has continuously introduced a series of new restrictions on China. These actions by the U.S. seriously harmed China's interests and severely disrupted the atmosphere of bilateral economic and trade talks. China strongly opposes this.
The spokesperson emphasized that threatening with high tariffs is not the right way to deal with China. China's position on the tariff war has always been clear — we don't want to fight, but we are not afraid to do so. China urges the U.S. to quickly correct its wrong practices, guided by the important consensus of the leaders of the two countries, to safeguard the hard-won negotiation achievements, continue to give full play to the role of the Sino-U.S. economic and trade consultation mechanism, resolve each other's concerns through dialogue on the basis of mutual respect and equal consultation, properly manage differences, and maintain the stable, healthy, and sustainable development of Sino-U.S. economic and trade relations. If the U.S. persists in its own ways, China will certainly take corresponding measures to protect its legitimate rights and interests.
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