It was a week of high-stakes brinkmanship, sharp warnings, and economic saber-rattling between the world’s two largest economies. On Monday, October 13, 2025, U.S. Treasury Secretary Scott Bessent delivered a pointed message to China, making it clear that, in his words, China would “neither command nor control America.” His warning came on the heels of President Donald Trump’s threat to slap a punishing 100% tariff on all imports from China starting November 1, a move that sent financial markets into a tailspin and triggered a flurry of responses from Beijing.
The timing of these escalations is no coincidence. According to Fox News, Bessent emphasized, “We have already been in touch with our allies…meeting with them this week. We expect support from India and other countries…It’s China versus the world. They had pointed a bazooka at the supply chain and industrial base of the entire free world. We are not gonna have it. China is a command-and-control economy. They are neither going to command nor control.” The message was unmistakable: the U.S. was rallying its partners for a united front, and all options were on the table.
But it wasn’t just words flying across the Pacific. Beijing, in a move that rattled markets and sent anxiety rippling through Washington and beyond, unveiled sweeping new restrictions on exports of rare earth materials. These 17 elements, though not truly rare, are notoriously difficult to extract and refine. Southern China holds the world’s richest deposits, making the country the source of about 90% of global supply. Rare earths are essential for manufacturing computer chips, electric vehicles, wind turbines, and even missile systems—industries at the heart of both nations’ economic and security interests.
The Wall Street Journal reported that the Chinese Commerce Ministry’s new rules require any company—foreign or Chinese—to obtain official approval before exporting materials containing more than 0.1% rare earth content. The restrictions also expanded the list of minerals under control and, for the first time, unilaterally barred their use by foreign militaries. The language of the law is intentionally vague, giving Beijing broad discretion to enforce it selectively—an unmistakable signal that rare earths are now a bargaining chip in the trade war.
Industry insiders have long compared the importance of rare earths to a pinch of baking powder in a recipe: used in tiny amounts, but without them, nothing works. Perhaps most valuable is dysprosium, indispensable for electric motors, missile guidance systems, and semiconductor equipment. The sectors most affected by the new restrictions are semiconductors, automotive, and defense. While consumer electronics like PCs may escape the worst of the bans, intermediate goods—such as AI chip components and high-performance motors—are squarely in the crosshairs. Automakers, already battered by earlier delays in Chinese licensing, now face another blow since both gasoline and electric vehicles rely on magnets made from rare earths.
Beijing’s actions didn’t stop there. In a tit-for-tat response to new U.S. port fees, China announced it would begin charging American ships for docking at its ports. Simultaneously, China’s regulators launched an antitrust investigation into U.S. semiconductor giant Qualcomm over its acquisition of Israeli company Autotalks. This follows accusations just weeks earlier that Nvidia, another American tech titan, had violated Chinese anti-monopoly law. These moves, according to Moneycontrol, were widely interpreted as direct retaliation for Washington’s recent economic measures.
President Trump, never one to back down from a fight, responded with a lengthy Truth Social post: “The United States of America will impose a tariff of 100% on China, over and above any Tariff that they are currently paying. Also on November 1st, we will impose Export Controls on any and all critical software.” He hinted at the possibility of skipping the planned meeting with President Xi Jinping in South Korea later this month, though Bessent later confirmed that the summit remained on track. Staff-level meetings between U.S. and Chinese officials are also set to take place in Washington and on the sidelines of the World Bank and IMF annual gatherings this week.
“The 100% tariff does not have to happen,” Bessent told Fox News. “The relationship, despite this announcement last week, is good. Lines of communication have reopened, so we’ll see where it goes.” He noted that while China remained open to discussion, the U.S. had “substantial levers” it could pull if talks faltered. “We could move more aggressively than China has done. Everything is on the table,” he added, underscoring the high stakes and unpredictability of the moment.
For all the public bluster, the underlying reality is that both sides are acutely aware of the risks. China’s dominance in rare earths gives it enormous leverage, especially since the U.S. and its allies have struggled to build alternative supply chains. There are mines in the United States, Australia, and parts of Africa, but the capacity to process these minerals remains overwhelmingly in Chinese hands after decades of market consolidation. Even non-Chinese rare-earth plants often depend on Chinese technologies, which now fall under Beijing’s export controls. Analysts warn it could take years for the U.S. and Europe to achieve anything close to self-sufficiency, leaving their industries exposed to Chinese coercion in the meantime.
The new restrictions inject fresh uncertainty into already fragile global supply chains for clean energy, defense, and artificial intelligence technologies. As Moneycontrol put it, “The rare-earth jolt is as much about the minerals as about who controls the rules of the world economy.” With both sides escalating their economic warfare, the world is left to wonder: who will blink first?
For now, the world watches as the two superpowers square off, each wielding their own economic weapons—tariffs, export controls, and regulatory probes. The outcome of the Trump-Xi meeting later this month could shape the future of global trade, technology, and geopolitical balance for years to come. One thing is certain: the stakes have never been higher, and the rules of the game are being rewritten in real time.