The View | Can Scott Bessent see China’s trade counterstrike with clear eyes?
China’s export control regime on rare earths isn’t retaliation for recent US restrictions – it’s a response to overall US policy
To better understand China’s latest move, Bessent must look inward. He could start by reviewing US legislation against China over the past decade or more. To gain a deeper insight, he should learn Chinese history to see how the country’s leaders responded to past adversity and humiliation with strategic patience. China’s restrictions were not authorised in a vacuum. They were the result of rigorous deliberation.
Regardless of whether the 100 per cent tariff threat was a rational response, Trump had at least an intuitive grasp of the situation. Even though the export control measures announced by China are quite complex, Trump understood the gravity of the situation when he saw the share price corrections of Apple and Taiwan Semiconductor Manufacturing Company in the aftermath.
China’s intricate export control framework is not the product of a 10-day scramble after September 29 but rather the result of patient planning. China was waiting for the opportune moment and the US obligingly provided the perfect pretext.
To resolve the stand-off, the US negotiation team must understand this: China was not responding to extra provocative measures unveiled by the US. Beijing has been preparing for a strategic counterstrike against cumulative American hostility for more than a decade.
China’s “extraordinarily aggressive” position should not mystify the US. It mirrors America’s own playbook. China is merely doing unto the US what the US has been doing to China. You reap what you sow.
Given the asymmetric trading relationship, China cannot effectively respond likes with likes: tariffs for tariffs or port fees for port fees. In one masterstroke, China is responding to all the blows it has endured from the US for more than a decade.
The announced regulatory scheme in relation to the rare earth supply chain is not a blunt instrument like a tariff but rather a surgical tool that can be used with nuance and precision. China does not seek to wreak havoc on the world economy by totally restricting the flow of rare earths and products they help produce. Rather, it wants to signal to the US that it wants a reset of their technology and economic relationships.
China is making a statement that the supply chains of the US and China – even at the critical level – are now truly interdependent. The implication is stark: endless escalation is no longer viable, and the US must contemplate dismantling the very tech restrictions it has spent years constructing.
As Bessent prepares the ground in Kuala Lumpur, Malaysia, he must transcend the myopic blame narrative and confront an uncomfortable truth: the asymmetric order the US has engineered is collapsing under its own contradictions. Washington must reckon with its legacy, from Huawei’s suppression to extraterritorial tech controls, and accept that its de-risking strategy has paradoxically amplified global vulnerabilities.
The path forward demands that the US shed its self-righteous denial and recognise the fact that containment boomerangs. Trump carries a unique duality as the architect of escalated containment who is pragmatic enough to recognise its failure, hence his recent admission that he doesn’t want to hurt China.