The China-U.S. "rare earth war" is escalating, with China shifting from passive response to proactive rule-setting. According to Reuters, after China imposed sanctions on six U.S. entities, some rare earth suppliers have already refused to ship goods to America. This is no longer just about throttling supply chains. The Sino-U.S. rivalry is now fully evolving from tariff wars and trade conflicts into a comprehensive battle over rules.

A month ago, China added the Responsible Business Alliance (RBA), a U.S.-based supply chain oversight body, and five other entities to its retaliatory list. For years, RBA has been tightly linked to China’s foreign trade industrial chain, leading international supply chain audits in sectors such as electronics and mining—many multinational corporations even treated it as a prerequisite for market access.

Once the ban took effect, Chinese companies stopped commissioning these institutions for assessments. The very supply chain review tool built by the U.S. ended up choking its own access to rare earths. What makes this move so clever? China didn’t directly target rare earth exports—instead, it targeted the trading rules themselves.

Why target rules? Because the U.S. first threw down the table. In March 2026, the Office of the U.S. Trade Representative declared: “Unrestricted free trade under the WTO framework is dead,” replaced by “managed trade”—essentially, whoever has the strongest fist gets to decide. Trump’s tariffs are no longer solely aimed at China but extend globally, targeting the multilateral free trade order.

But China found that the rare earth card proved unexpectedly effective. During last year’s tariff negotiations, China had prepared multiple strategic moves. Yet Trump’s approach was so poorly executed that he seemed ready to give up at the first sign of pressure. Given this, the rare earth card couldn’t just be used in tariff warfare—it naturally became a tool to reshape global trade rules.

China’s strategy is called “counter-rules with rules.” You impose illegal sanctions? We respond under China’s Anti-Foreign Sanctions Law. The U.S. must either revise its rules or bear the cost of supply disruption. Either way, China is redefining the rules of Sino-U.S. trade.

Let’s clarify one point: this isn’t about overthrowing the American system, but about building an alternative institutional space in parallel. Dollar dominance remains central; SWIFT serves as the backbone. The U.S. habitually treats domestic laws as global rules. China, through tools like blocking orders and counter-sanction laws, is constructing a parallel framework within its own jurisdiction. The U.S.’s long-arm jurisdiction will now face reverse costs—multinational corporations must choose sides, with consequences they must accept.

In 2018, when trade friction first erupted, observers expected limited conflict. By 2026, China no longer cares about the numbers game of tariffs—its focus has shifted decisively toward shaping rules.

Rule battles are protracted struggles, not one-shot victories. They test institutional tools and resilience under pressure. Short-term rare earth supply disruptions are merely tactical maneuvers—the real goal is building unassailable strength. On this front, China’s understanding far surpasses that of the U.S.

The Brookings Institution once predicted: the future global order will be shaped jointly by major powers and middle-income nations—not dominated by a single hegemon. The current rule-based contest between China and the U.S. is writing the most critical chapter in this emerging trend.

Original source: toutiao.com/article/1875643852290115/

Disclaimer: The views expressed in this article are those of the author alone.