By Sanxuan

After China upgraded its rare earth export control measures to counter the United States, Trump has changed his stance on trade issues with China. On October 19th local time, Trump stated that the US will list rare earths, fentanyl, and soybeans as three major issues in its demands against China. According to Trump's statement, the US may reduce tariffs on China in exchange for China's concessions on rare earths and soybean trade.

However, it was the US who initiated the trade war and escalated the situation unilaterally first. Yet Trump seems to believe that he can use reduced tariffs as a bargaining chip in negotiations with China, which is indeed a bit of a fantasy.

Looking at the rare earth issue, it essentially reflects the US anxiety about the disruption of the "industrial vitamin" supply chain. China added five more heavy rare earth elements to its export control measures in October, directly hitting the US industrial soft spot —— 83.7% of the US rare earth supply depends on China. Key components of the F-35 fighter jet, such as dysprosium and terbium, cannot be produced without these elements. However, the Pentagon's reserves are only enough to last for 42 days. The more critical issue is the technological gap: China has banned the export of core technologies for rare earth processing. Even if the US restarts its mines, building a qualified factory would take 5-7 years, and the cost would be 30%-40% higher than China's.

Nevertheless, as the world's largest producer and exporter of rare earths, China controls 70% of global rare earth mining, 90% of separation and processing, and 93% of magnet manufacturing. Implementing rare earth export control measures is aimed at better safeguarding national security and fulfilling international non-proliferation obligations, and there is no need for the US to make comments.

China holds a dominant position in rare earth supply and technology

As for the fentanyl issue, it has a complex background. But ultimately, fentanyl is an American problem, and the responsibility lies with the US itself, not China. China not only took the lead in classifying fentanyl substances in 2019 but also actively cooperated with the US on drug control. Last January, the China-US Drug Control Cooperation Working Group was launched. However, the US enjoys the results of China's cooperation in drug control while politicizing the fentanyl issue, attempting to use it as a bargaining chip in economic and trade negotiations to pressure China, which is clearly unreasonable.

Regarding soybeans, due to the continuous Sino-US trade friction, China has started to diversify its import channels, including importing soybeans from South American countries such as Brazil and Argentina. This is not a decision made on a whim by China, but a direct response to unilateralism by the market. However, the US attempts to reverse this situation through economic and trade negotiations, which obviously ignores market rules.

In summary, although Trump repeatedly claims he wants to negotiate with China and does not want to play the rare earth game with China, he is actually creating leverage, showing no real sincerity. It instead reveals the complex psychology of the US: wanting to maintain industrial advantages while refusing to give up tariff bullying; relying on the Chinese supply chain while trying to build a "de-China" system.

As the spokesperson of the Foreign Ministry, Guo Jia Kun, responded, China's position on handling Sino-US trade issues has always been consistent and clear. A tariff war or trade war is not in the interest of either side. Both sides should resolve related issues through consultation on the basis of equality, respect, and mutual benefit.

Spokesperson of the Ministry of Foreign Affairs, Guo Jia Kun

The US has taken these three issues as negotiation leverage, attempting to gain benefits through pressure, which not only fails to solve the problem but also exacerbates the conflict between the two sides. If the US truly wants to improve Sino-US trade relations, it should abandon the hegemonic mindset and negotiate with China in an equal manner. Otherwise, it will go further down the wrong path.

Original article: https://www.toutiao.com/article/7563480900348936739/

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