The Current Status and Truth of the US-China Trade War: Is China Smiling Thanks to Trump?
Trade tensions between the United States and China are escalating once again. With the relaunch of the Trump administration, the tariff war between the two countries has entered a new phase. In this post, we will examine the truth beyond the sensational headlines and the complex current state of US-China relations.
1. Media Exaggeration: Has China Declared an “Emergency/War Mode”?
Recently, some media outlets have reported sensational news that “China has declared a state of emergency and entered war mode.” However, this is not accurate.
Fact check: Reuters reported that China’s Ministry of Foreign Affairs and Ministry of Commerce ordered staff to cancel vacations and remain on 24-hour standby, describing it as being “on a war-like footing.” Some media outlets exaggerated this statement in their headlines. The Chinese government has not officially declared a state of emergency or war mode.
Source: Reuters: China braces for renewed trade war with Trump with ‘war-like footing’
2. Diplomatic Tension: Guidelines “Prohibiting Dating/Sexual Relations with Chinese Nationals”
There were reports that the US government issued guidelines to its officials and diplomats working in China prohibiting private meetings, dating, and sexual relations with Chinese nationals.
Factual details:
- These guidelines were established during the Biden administration in the summer of 2024, not under Trump, and were reported in early April 2025.
- The Biden administration explained that this was a personal guideline from Nicholas Burns, the US Ambassador to China, but it is likely a government-level policy.
- Similar prohibitions existed for the Soviet Union during the Cold War, but issuing such clear guidelines for China is unprecedented.
3. Severe Tariff War: The Reality Beyond the Numbers
The current tariff war between the US and China is taking on extreme dimensions:
- The US has mentioned plans to impose tariffs of up to 145% on certain Chinese items.
- China is considering retaliatory tariffs of up to 125% in response.
- Trump promised during his election campaign to impose tariffs of more than 60% on Chinese products in general, with even higher tariffs on specific items like electric vehicles.
The real meaning of tariffs: When tariff rates exceed 100%, they effectively serve as an import-export ban. Therefore, the specific numbers don’t hold much significance and are more symbolic pressure and political performance.
China’s response: China has taken a hard-line stance, stating it will “ignore US tariff threats.” Chinese Foreign Ministry spokesperson Mao Ning quoted Mao Zedong’s remarks from the Korean War, expressing a determination to fight to the death.
Source: Financial Times: Trump plans to impose tariffs of up to 60% on all Chinese imports
4. Differences Between Trump’s First Term and Now: Is the US Becoming Isolated?
Trump’s first term (2017-2021):
- Started by imposing 25% tariffs on specific items and gradually expanded the list
- At that time, there were fewer major international instability factors besides US-China tensions
- The US showed willingness to engage in dialogue during trade negotiations
Current situation (Trump’s second term):
- Comprehensive pressure: Moving to impose high tariffs on all of China, not just specific items
- Disregard for alliances: Threatening tariffs on traditional allies like the EU and Canada, increasing the risk of US international isolation
- China’s opportunity: China is attempting to expand its diplomatic and economic influence by taking advantage of Trump’s destabilization of relationships with allies
Source: The Economist: Donald Trump’s trade policies threaten America’s alliances
5. China’s Powerful Weapon: Rare Earth Elements
China’s monopoly: Rare earth elements are essential resources for key industries such as semiconductors and advanced weapons. One F-35 fighter jet requires about 400kg, and a submarine needs 4.1 tons. These resources are crucial, but because of environmental pollution issues with extraction and refining processes, China effectively monopolizes the refining market.
Export controls: China recently announced measures restricting rare earth exports without special permission. This is a powerful pressure card against not only the US but the entire world.
US vulnerability: While the US has rare earth mines, it lacks refining infrastructure and must send mined materials to China or Australia for processing. Japan and South Korea have stockpiled certain quantities, but the US is relatively unprepared.
Source: Bloomberg: China Tightens Rare Earth Export Controls in Latest Trade Salvo
6. Trump’s Real Aim: “Build Manufacturing Plants in America!”
The core of Trump’s trade policy is domestic investment and job creation. His key strategy is pressuring foreign companies to relocate factories to the United States.
Practical difficulties: For governments, the relocation of domestic companies overseas means a significant reduction in corporate tax revenue. Countries that prioritize securing tax revenue for welfare and other purposes find this difficult to accept.
Source: CNBC: Trump’s ‘America First’ trade policy aims to bring manufacturing jobs back
7. Conclusion: Who Really Benefits?
Despite Trump’s strong anti-China rhetoric, analysis suggests his policies may actually be creating a favorable environment for China:
- Declining US credibility: Damaging relationships with allies is weakening US international leadership and credibility
- China’s opportunity: China is gaining opportunities to expand its diplomatic and economic influence by exploiting the rifts between the US and its allies
- The danger of forcing “either/or” choices: The binary logic that countries must unconditionally side with the US during a time when US credibility itself is shaky is detached from reality
Points to Watch Going Forward
- What other unpredictable statements and policies will Trump introduce?
- How many more countries will become disappointed with Trump’s actions and distance themselves from the US?
- How effectively will China use this opportunity to increase its influence?
Rather than viewing this simply as a battle over tariff numbers, we should monitor the direction of US-China relations while considering the changing international situation and the complex interests of each country.
Additional Consideration: South Korea’s Position
South Korea is in a typical “sandwich” situation, depending on the US for security and China for its economy. As US-China trade tensions intensify, South Korea faces increasingly difficult diplomatic choices.
Impact on the semiconductor industry: South Korea’s key semiconductor industry is at the forefront of US-China conflict. Korean companies must make complex strategic decisions between US technology sanctions against China and China’s own technology development.
Seeking regional cooperation: In this situation, movements to strengthen cooperation within East Asia are emerging, such as the trade ministers’ meeting between South Korea, China, and Japan being held for the first time in five years.
Source: South China Morning Post: South Korea navigates US-China tensions as trade war looms
[Reference] Understanding Rare Earth Elements
Rare earth elements refer to 17 metallic elements, including 15 lanthanide elements plus scandium and yttrium from the periodic table. Despite the name “rare earth,” they are relatively abundant on Earth, but deposits with high concentrations are scarce, and extraction and refining processes are complex and cause environmental pollution.
Rare Earth Elements
Major Uses of Rare Earth Elements
1. Defense and Military Technology
- Advanced weapon systems: An F-35 fighter jet uses about 400kg of rare earth elements
- Radar systems: Neodymium, samarium, dysprosium, etc. are used in radar and sonar equipment
- Guided missiles: Used in sensors and propulsion systems of precision-guided missiles
- Night vision equipment: Europium, terbium, etc. are used in night vision equipment
- Laser equipment: Ytterbium, neodymium, etc. are necessary for military laser systems
2. Advanced Electronics
- Smartphones: Used in display color implementation, speakers, vibration motors, batteries, etc.
- Computers: Required for hard drives, circuit boards, displays, etc.
- Audio equipment: Neodymium is used in magnets for high-performance speakers and headphones
3. Energy and Green Technology
- Electric vehicle batteries: Lanthanum, cerium, neodymium, etc. are used in batteries and motors
- Wind turbines: A large wind turbine generator uses about 600kg of rare earth magnets
- Solar panels: Rare earth elements are used in some types of solar panels and inverters
4. Medical Equipment
- MRI equipment: Gadolinium, dysprosium, etc. are essential for magnetic resonance imaging (MRI) scanners
- X-ray equipment: Rare earth elements are used in some X-ray and radiation therapy equipment
- Laser surgery equipment: Ytterbium, holmium, etc. are used in medical laser equipment
5. Petrochemical Industry
- Catalysts: Lanthanum, cerium, etc. are used as catalysts in petroleum refining processes
- Gasoline additives: Used as additives to improve combustion efficiency