With Power Move on Rare Earths, China Plays Both Victim and Bully

In Beijing’s version of the trade war, the United States is the bully and China is a victim, a rising power trying to protect the global economy while Washington unfairly hurls tariffs and technology bans its way.

That narrative is getting harder to square with the image of China that has emerged in recent days: that of an industrial juggernaut ready to use its chokehold over minerals crucial to modern manufacturing against any country, or company, that stands in its way.

China mines and processes much of the world’s rare earths, which are needed for everything from computer chips to electric vehicles and fighter jets. In retaliation against President Trump’s tariffs and tech restrictions, Beijing has introduced a system that would control the trade of a huge swath of tech products, anywhere in the world, that contain trace amounts of Chinese rare earths.

The move gives Beijing powerful leverage going into a meeting next week between Mr. Trump and China’s leader, Xi Jinping, a chance to remind Washington that China’s grip on the minerals can shape the terms of any trade truce.

Still, the economic muscle-flexing could backfire for Beijing, which has spent years condemning the American export controls that it now says it is copying. By showing its willingness to weaponize rare earths — limiting access to only those countries that it favors — China risks looking like the irresponsible hegemon that it often accuses the United States of being.

“China’s walking a fine line here between strengthening its position in U.S.-China trade negotiations and scaring the rest of the world about its export control intentions,” said Neil Thomas, a fellow at the Asia Society Policy Institute’s Center for China Analysis.

China has pressed Washington to drop its restrictions on exports of advanced semiconductor chips, lower tariffs and remove obstacles to Chinese investment in the United States. In response, Mr. Trump has threatened an additional 100 percent tariff on Chinese products and export restrictions on U.S. software.

The two sides, analysts believe, could try to stabilize the relationship and agree to suspend their most punitive measures — meaning a pause on U.S. tariffs and expanded tech restrictions, and a delay in the Chinese controls on rare earths.

“If bilateral relations are bad or not good, then it may take a long time to handle the applications for export. Or even in some cases, applications may be rejected,” said Wu Xinbo, dean of the Institute of International Studies at Fudan University in Shanghai.

China has also said that Beijing is merely mirroring extraterritorial export controls first imposed by the United States, like those imposed to block technology to the Chinese tech giant Huawei.

“We basically followed the precedent set up by the U.S. and its allies a long time ago, so if you want to say this is coercive, fine, you know, we just learned from you, right?” Mr. Wu said.

That naked coercion, which some analysts have compared to Mr. Trump’s “Liberation Day” tariffs for its wide-reaching, one-sided approach, may undermine efforts by Chinese leaders to cast their country as a reliable trading partner, a defender of globalization and a viable alternative to the United States as a global leader.

As the backlash against the measures has grown, Chinese officials have been trying to downplay them, saying that they are not export bans.

China’s vice commerce minister Ling Ji met on Monday with representatives of more than 170 foreign companies and business groups, offering reassurances that China would continue to approve “legitimate” transactions and maintain stability in the supply of rare earths.

But experts say China is unlikely to roll back the measures. Chinese officials have been honing export controls as a tool since as early as 2017.

“The gun is loaded, and they’ve demonstrated their intention to pull the trigger at some point,” said Rush Doshi, a former Biden administration official and author of “The Long Game: China’s Grand Strategy to Displace American Order.”

“So the question now is only what issue they’ll pull the trigger on,” he said. Beijing, he added, is likely to use the controls to strengthen its hand first in economic negotiations and eventually over other issues, including its claims over Taiwan, the island democracy.

At home, there is a degree of national pride around the new system, with Chinese state media and commentators hailing their country’s transformation from the world’s supplier of rare earths to a leader maintaining order in the global supply of the critical elements.

“The U.S. is used to making moves and others following. Now that China is taking the initiative, they are a bit passive, uncomfortable, surprised and even shocked that China could be like this,” said Xu Hongcai, deputy director of the economic policy committee of the China Association of Policy Sciences in Beijing.

While China has deployed various forms of economic coercion before, including cutting off shipments of rare earths to Japan in 2010, experts say the latest measures are its most aggressive.

Part of China’s goal in applying the rule globally, not just toward the United States, may be to deter other countries from trying to reduce their reliance on Chinese supply chains, a strategy known as “de-risking.”

“They knew they were going to get some blowback, but they thought it was important to show strength and to show the flex here, to show anyone who might be thinking about aligning with the U.S., or pursuing their own de-risking agenda, that that’s not going to be cost-less for them,” said Emily Kilcrease, a senior fellow at the Center for a New American Security.”

The European Union trade chief, Maros Sefcovic, told Commerce Minister Wang Wentao of China on Tuesday that Beijing’s new rare earths regime “casts a shadow over our relationship.” Officials for the Group of 7 nations — Britain, Canada, France, Germany, Italy, Japan and the United States — have said they are considering a joint response.

Treasury Secretary Scott Bessent said on Wednesday that the United States was considering putting restrictions on software exports to China in retaliation for the rare earths restrictions, a move he said would be done with other G7 nations.

“This time around you see that it’s not just the U.S. complaining,” said Kyle Chan, an adjunct researcher at the RAND Corporation focusing on China’s industrial policy. “It was many countries that felt like this is not only destabilizing for them, but it’s seen almost as an aggressive act.”