Escalation of the China-U.S. Trade War: The Clash of Rare Earths and Chips — The Contest Behind the Non-Tariff Barrier Battle
This article analyzes Liu Heping’s perspective on the new developments in the China-U.S. trade war. It points out that after the tariff war has largely subsided, the Trump administration has turned to non-tariff barriers—tightening visa scrutiny for Chinese students, suspending exports of high-tech products, and restricting high-end chips. In response, China is leveraging rare earth export controls, exposing America’s “Achilles’ heel” of dependency on Chinese rare earths. The conflict has shifted from tariffs to a battle over technology and resources centered on rare earths and chips. Liu emphasizes that China’s rare earth strategy is more about defensive maneuvering to push the U.S. to ease chip controls, rather than a total export ban. If the standoff persists until 2030, both sides risk losing markets and facing industrial decoupling, with far-reaching global economic impacts.
