China’s “rare earths trap” gives it the upper hand in trade war

According to the Financial Times, China is better positioned than the U.S. for a new trade confrontation under President Trump. Even if Washington imposes 100% tariffs, Beijing still holds powerful leverage — including control over rare earth minerals and key pharmaceutical ingredients essential to American industries.

Source Financial Times

Experts note that around 700 drugs used in the U.S. rely on Chinese-made ingredients, while China dominates the global supply of rare earths critical for military and tech production. Any export restrictions from Beijing could quickly disrupt U.S. manufacturing lines.

Still, analysts warn that a prolonged conflict would hurt both sides. China depends on exports to sustain its economy, while America struggles to find replacements. As FT concludes: “In a trade ring, one side may win the day — but both fighters walk away bruised.”