With Tariff Threat and Trade Controls, China and U.S. Renew Game of Chicken

China’s decision to tighten export controls on rare earth metals was not only about strengthening its grip on the world’s supply of the crucial minerals. It was also a high-stakes ploy to jolt President Trump into paying attention to what Beijing felt were attempts by his subordinates to sabotage a U.S.-China détente, analysts say.

Evidently, it worked: Mr. Trump has redirected his focus toward trade with China. But China’s move also unnerved governments and businesses in Europe, and sparked another round of tit-for-tat trade blows, rattling stock markets.

Days after Mr. Trump said he would impose 100 percent tariffs on Chinese goods next month, China added five American subsidiaries of a South Korean shipping company to its sanctions list. On Tuesday, Mr. Trump threatened to cut off U.S. purchases of Chinese cooking oil.

By Wednesday, Treasury Secretary Scott Bessent suggested the U.S. government would counter Chinese economic measures by exerting more control over private American businesses in key strategic sectors.

China was reacting to a Sept. 29 decision by the U.S. Department of Commerce to expand the number of companies, including potentially Chinese ones, blacklisted from acquiring American technology. That move surprised Beijing, which thought the countries had reached a truce in their trade war after four rounds of negotiations and a Sept. 19 phone call between Xi Jinping, the Chinese leader, and Mr. Trump, Chinese analysts said.

Flexing China’s control over rare earths — akin to poking Mr. Trump in the eye — may also have been intended by Mr. Xi to demonstrate his strength to a domestic audience before a crucial meeting of Communist Party leaders next week.

“If you are the leader and you just had a phone conversation” with the U.S. president, “and then 10 days later, they slapped you on your face, what would you do ahead of a major political event?” said Wu Xinbo, dean of the Institute of International Studies at Fudan University in Shanghai.

Analysts who have spoken to Chinese officials said that Beijing believed that the Commerce Department move — which would target thousands of Chinese companies — was the work of hawkish members of the Trump administration. The sense in Beijing was that Mr. Trump, who was focused on Gaza peace talks and the U.S. government shutdown, needed to be made aware of the consequences of these moves.

“By launching a very strong counterattack on the U.S. side, Beijing is reminding Donald Trump that you have to take a hands-on approach to relations with China” and not let “hawkish people” derail relations between the two countries, Prof. Wu said.

Beijing was particularly aggrieved because it felt it had shown good will to the Trump administration by agreeing to allow the sale of TikTok, the analysts said.

The question now is whether Beijing’s gambit will succeed in getting the Trump administration to back down, or if it results in a full-blown trade war that could lead to a global slowdown. Already, it has led to a broader backlash, with the European Union trade commissioner accusing China of weaponizing its hold on the minerals and urging the European bloc to coordinate with Group of 7 nations to push back against the restrictions.

“The Chinese miscalculated,” said Yun Sun, the director of the China program at the Stimson Center in Washington, who is currently visiting Beijing. “People around the world saw the rules and were shocked and considered it an overreaction.”

For China, threatening to cut off access to its rare earth minerals has been its ace card against the United States.

Beijing controls most of the world’s supply of those metals, which are needed for virtually every modern-day technology, including semiconductors, robots and jets. Earlier this year, the same tactic helped persuade the Trump administration to suspend its threat to impose sky-high tariffs on Chinese goods.

It is probably not a coincidence that China is taking such an assertive posture ahead of a Communist Party meeting to lay out the blueprint for the country’s plan for the coming five years.

Chinese leaders typically want to project stability and strength during the meetings to burnish their legitimacy, analysts say.

“You have to respond strongly so that you can — I wouldn’t say save face — but you have to consolidate your political position and show to a domestic audience that you are strong enough to protect China’s national interests in the face of the provocation,” Prof. Wu added.

With tensions heating up again, it is unclear if Mr. Trump and Mr. Xi will meet on the sidelines of the Asia-Pacific Economic Cooperation summit in South Korea later this month, as had been anticipated.

Both sides continued to up the ante in the past week. They began charging higher port entry fees for each other’s shipping firms. The Chinese government blacklisted five American subsidiaries of the South Korean shipping company Hanwha, accusing the subsidiaries of “supporting and assisting” the United States in its moves in the shipbuilding industry.

Mr. Trump said in a Truth Social post that Beijing was harming American soybean farmers. He threatened to restrict more trade with China, including by boycotting Chinese cooking oil.

U.S. analysts say that the Chinese Ministry of Commerce appeared to be aware that it may have overreached, as the ministry sought to reassure the world that the new controls would not be used widely and did not represent a blanket ban, even as it vowed to fight back against any tariffs.

China was overly confident that it could get Washington to walk back its latest sanctions and, at the same time, avert any global blowback, analysts said.

But China can ill afford more trade tensions on top of its existing troubles with the United States. Exports are among the few engines of growth for a Chinese economy suffering from a prolonged property crisis and a deflationary spiral, caused by overproduction in key industries and falling prices.

Evan S. Medeiros, a professor of Asian studies at Georgetown University who was an Asia adviser to President Barack Obama, said China could have pushed back without threatening economic coercion against its geopolitical rivals.

“This is a hell of a way to get Trump’s attention,” Prof. Medeiros said. “You get somebody’s attention by waving your hands in the air, not by arming yourself to the teeth and just promising you’re not going to use a 50-caliber machine gun on them.”

The new rare earths export controls, which are modeled after U.S. export controls, were likely developed well in advance of their unveiling, experts said. Some analysts say that suggests Beijing was merely looking for a pretext — like the new Commerce Department rules — to deploy the new measures.

“Xi fundamentally doesn’t want to give the U.S. rare earths, or really any ‘strategic materials’ it has,” said Kirsten Asdal, head of the China-focused consultancy firm Asdal Advisory. “The party has articulated that the country that controls the upstream inputs will enjoy the ability to develop the most advanced technology and keep it from others.”

Lily Kuo contributed reporting from Taipei, Taiwan, and Berry Wang from Hong Kong.