Published on: 2025-10-12

Intelligence Report: China slams Trump’s 100 percent tariff threat defends rare earth curbs – Al Jazeera English

1. BLUF (Bottom Line Up Front)

The strategic judgment is that the ongoing trade tensions between the United States and China, particularly around tariffs and rare earth exports, are likely to escalate, with a moderate to high confidence level. The hypothesis that China is using rare earth export controls as a strategic leverage point in trade negotiations is better supported. Recommended action includes preparing for potential disruptions in global supply chains and encouraging diplomatic engagement to de-escalate tensions.

2. Competing Hypotheses

1. **Hypothesis A**: China’s rare earth export controls are primarily a strategic move to gain leverage in trade negotiations with the United States.
2. **Hypothesis B**: China’s actions are a defensive measure in response to perceived aggressive trade policies from the United States, with no intention of escalating tensions further.

Using ACH 2.0, Hypothesis A is better supported due to China’s historical use of economic measures as leverage in negotiations and the timing of the export controls coinciding with heightened trade tensions.

3. Key Assumptions and Red Flags

– **Assumptions**: It is assumed that China has the capacity to sustain its rare earth export controls without significant domestic economic impact. Another assumption is that the U.S. will not find alternative rare earth sources quickly.
– **Red Flags**: The lack of explicit communication from China regarding the duration and extent of export controls. Potential cognitive bias includes overestimating China’s willingness to compromise in negotiations.

4. Implications and Strategic Risks

The escalation of trade tensions could lead to significant disruptions in global supply chains, particularly in technology and defense sectors reliant on rare earth elements. There is a risk of further economic decoupling between the U.S. and China, which could have long-term geopolitical and economic consequences. Additionally, the potential for retaliatory measures from the U.S. could exacerbate tensions.

5. Recommendations and Outlook

• Encourage diplomatic channels to address trade disputes and explore mutual concessions to de-escalate tensions.
• Develop contingency plans for industries reliant on rare earth elements to mitigate supply chain disruptions.
• Scenario-based projections:
  • Best: Successful negotiations lead to a reduction in tariffs and easing of export controls.
  • Worst: Further escalation results in a full-scale trade war impacting global markets.
  • Most Likely: Continued tit-for-tat measures with periodic negotiations yielding limited progress.

6. Key Individuals and Entities

– Donald Trump
– Xi Jinping
– China’s Ministry of Commerce
– Taiwan’s Ministry of Economy
– TSMC (Taiwan Semiconductor Manufacturing Company)

7. Thematic Tags

national security threats, trade tensions, rare earth elements, global supply chain, U.S.-China relations