Here's how Trump can hit China's economy where it really hurts as analysts say Beijing's rare earths gamble could backfire | Fortune

Trump's Rare Earths Gambit: A Potential Game-Changer in US-China Trade Tensions The Trump administration has hinted at unleashing a more potent trade weapon against China, leveraging the US's dominance in rare earth elements to hit Beijing where it hurts most. According to analysts, this move could backfire and have far-reaching consequences for both economies. Timeline of Events On February 22, President Donald Trump announced an additional 100 tariff and software restrictions on China, citing its sweeping rare-earths export controls. In a Truth Social post before the tariff move, Trump warned that the US has "Monopoly positions" in rare earths, stronger and more far-reaching than China's. The planned tariffs have been met with skepticism by analysts, who argue they are unsustainable. Immediate Impact The US-China trade tensions have reignited over Beijing's rare-earths export controls. The Trump administration's initial response was to impose additional tariffs on Chinese goods, but this move has sparked concerns about a potential escalation. Analysts warn that the US's rare earths dominance could be used as leverage in future negotiations. Background Context China controls more than 90% of the world's processed rare earths and rare earth magnets, making it a critical player in the global supply chain. The US, on the other hand, has significant reserves of rare earth elements, particularly in California and Wyoming. Analysts argue that the US could use its dominance to pressure China into concessions. What Happens Next As trade tensions continue to simmer, analysts predict that the Trump administration may unleash a more potent trade weapon against China. This could include tariffs on Chinese goods or restrictions on rare earths exports. The impact of such measures would be far-reaching, potentially disrupting global supply chains and affecting industries reliant on rare earth elements. In conclusion, the US-China trade tensions have reached a critical juncture, with both sides vying for control in the rare earths market. As analysts warn that Beijing's gamble could backfire, the world waits with bated breath to see what happens next. *This story is developing. Information compiled from Fortune reporting.*