Donald Trump’s tariff war on China just took a major hit after a huge announcement by the communist nation.
After China announced it was going to stop rare earth exports, Trump backed off his tariffs.
When I initially wrote about this tariff war, I had stated that the key to everything was China.
Most people did not realize that because of our consumer dollar, it was not Trump who had the leverage; it was China with minerals and medicine. I was hoping China would fold first to keep those American dollars coming in, but President Xi forced Trump to blink first.
Earlier this week, China sent out a message to other nations faced with tariffs, telling them not to cut a deal. The Chinese Commerce Ministry stated, “China believes that all parties should stand on the side of fairness and justice, on the side of historical correctness, and defend international economic and trade rules and the multilateral trading system on the issue of ‘reciprocal tariffs.
"China firmly opposes any party reaching a deal at the expense of China’s interests. If this happens, China will never accept it and will resolutely take countermeasures in a reciprocal manner.”
China had also announced that it was cutting rare earth exports, a crippling blow to the tech and renewable energy sector.
If the exports are halted, in just a few months, these industries would come to a screeching halt, clearly not good for Trump or American business interests.
Thomas Kruemmer, Director of Ginger International Trade and Investment, explained, "Everything you can switch on or off likely runs on rare earths," including medical technology. So you can see why we are getting into dangerous territory here.
From the reports I saw, the United States imports more than 60% of its rare earth minerals from China, hence why Trump is pushing Ukraine so hard for a minerals deal.
Trump is trying to paint this differently, but he blinked, and hopefully it is not too late.
Trump stated, "One hundred forty-five percent is very high, and it won’t be that high. It will come down substantially, but it won’t be zero."
White House spokesman Kush Desai tried to spin this as well, stating, "President Trump has been clear: China needs to make a deal with the United States of America. When decisions on tariffs are made, they will come directly from the president. Anything else is just pure speculation."
Let’s be honest here. Trump took a swing, a move most of us backed, but he missed because China was willing to hold out longer. The right move is to back off and get this trade war over with before we get to the point of no return.
