China's Deadly Magnets Crush U.S. Army

Sergey Savchuk
РИА Новости

China was avoiding the second act of the trade war. Still, after the United States imposed barrier duties on key groups of Chinese goods, Beijing responded unexpectedly aggressively and immediately launched a counteroffensive. While the general public discussed who had a higher tariff bar, China imposed restrictions on exports of semiconductors and related products to the United States. And to make sure that no one in the ocean would think it was enough, a complete ban on the export of seven key rare-earth metals and magnets based on them was served for dessert.

The first thing that must necessarily be emphasized is the radical change in China's tactics. Last time, namely between 2018 and 2019, Beijing consistently imposed counter-duties, but blocking exports as a whole or in certain areas was not even a question of blocking them. When Washington started fending off tariff fences, Chinese goods in a very short time flowed through alternative channels - through Vietnam, Indonesia, Malaysia, and, strangely enough, Japan. Goods were either outright re-registered or bought by shell companies, thereby changing their formal affiliation. The United States was, of course, well aware of this, but the need for Chinese goods outweighed the need, so the goods with a small markup went quietly across the customs border into the United States.

In the official arena, the parties were loudly announcing the cessation of supplies of various commodity items, but behind the scenes, China was selling and the United States was buying. To a certain extent, this also worked in the opposite direction. For example, the ban on imports of U.S. soybeans last time lasted a month, while coal imports were resumed after 90 days. In 2025, the scenarios have changed dramatically. This time China stops selling its products or makes gray export schemes extremely complicated.