China holds some mighty strong cards

In his continuous effort to control the media cycle and distract from the Epstein files, Trump has been threatening China on and off with huge tariffs.  But as usual, it looks like it’s bluster. Why?

“America has made an unusually directional economic bet that is at this moment totally dependent on Chinese rare earth exports. The circumstances that brought us here long predate Trump and are rooted in decades-long failures to retain our technological know-how and channel it into industrial production. It’s never too late for a wake-up call, but the country is in a terribly vulnerable position where China can snap its fingers and snuff out the only thing propping up our economy.

 

“The bet I’m talking about, of course, is on artificial intelligence, and the astronomical buildout of infrastructure, mainly data centers. Close to half of the gain in gross domestic product this year will come from data center construction, and around 80 percent of stock market gains are attributable to a handful of AI-heavy tech companies. OpenAI announced a trillion dollars in computing deals this year like it was nothing, and we’re on track for $500 billion in annual AI capex spending by next year.”

Rare earth elements aren’t all that rare, but China has managed to corner the market.

“China controls 70 percent of the mining, 90 percent of the processing, and 93 percent of the magnet manufacturing involving rare earths. It is a global chokepoint for electric vehicles, military weaponry, and virtually everything that needs a transistor or semiconductor. And that includes what’s needed to install and run data centers.”

There’s a boatload of money riding on those AI deals. If China pops the US AI bubble, it’s gonna mean a world of hurt for Trump’s friends. 

 

https://prospect.org/world/2025-10-14-china-trump-tariffs-rare-earth-minerals/

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