China announced that it is expanding its licensing system for foreign entities that want to buy rare earth metals from Chinese producers. In practice, this is Beijing showing its strength, which may lead to the outbreak of war between the US and the Middle Kingdom.
It started on Thursday, October 9, when the Chinese Ministry of Commerce announced that it was expanding its system of issuing licenses authorizing the purchase of rare earth metals from producers operating in China.
The system is not new, because it has been operating since April 4, 2025 and was introduced when Donald Trump started a customs war with China.
So far, these include samarium, gadolinium, terbium, dysprosium, lutetium, yttrium, scandium and neodymium magnets. It sounds innocent, but in practice, many modern devices will not be created without these components – electric, aircraft and rocket engines, as well as nuclear reactors, temperature sensors, monitors, sonars and hard drives. In other words, China can decide how and where the modern economy will operate!
Apart from the smartphone market, it is worth adding that this will make armaments more difficult: the F-35 fighter contains over 400 kg of rare earth metals! The situation is more difficult than in the case of gas or oil – these rare earth metals cannot be replaced. At least with the current development of technology.
According to United States Geological Survey estimates for 2024, global deposits of rare earth metals amount to approximately 110 million tons – as many as 44 million tons are located in China. Beijing also controls approximately 90 percent. their processing.
Trump reacts
Of course, this is a blow mainly to the USA. We didn’t have to wait long for Donald Trump’s reaction.
Very strange things are happening in China! They are becoming very hostile and sending letters to countries around the world saying they want to impose export controls on every item of production related to rare earth metals and practically anything else they can think of, even if it is not made in China
– he wrote on his social networking site Social Truth.
There is no way China would be allowed to hold the world ‘hostage’, but that seems to have been their plan for a long time
– he added.
He immediately warned that he might cancel a planned meeting with Chinese leader Xi Jinping. He also announced the introduction of additional 100% tariffs on goods from the Middle Kingdom and the introduction of export controls on all critical software.
As a result of all this, there was a collapse in the stock and cryptocurrency markets. Bitcoin dropped to $102,000 and currently costs $111,805. You can read more about this in the article by Richard the Great.
Do we know the cause of the future war?
This situation resembles what happened before World War II. Or more precisely: before Japan attacked Indochina and Pearl Harbor. Then the USA behaved similarly to China now: it blocked the Land of the Rising Sun from access to oil. As a result, they provoked Japan to start hostilities.
Will it be the same now? Unfortunately, we are dangerously close to an armed conflict between the US and China. If America wants to maintain its status as a superpower, it cannot allow another country to blackmail it, humiliate it and show a lack of agency. Above all, the White House cannot afford for Beijing to cut it off from key metals.
I am not suggesting, however, that a US-China war will break out quickly, but currently the world is getting closer to this worst-case scenario.
So far, asset markets – shares and cryptocurrencies – have reacted to the further escalation of the conflict with declines. Further tensions may result in further “promotions”.
