Bharat Global Time | June 12, 2025
In a dramatic turn of events, the United States has agreed to cut tariffs by 55% on a range of Chinese exports, particularly those linked to rare earth materials, in what experts are calling a strategic surrender to Beijing’s economic blackmail.
This move comes after months of intense pressure from China, which controls over 80% of the global rare earth supply — materials critical to advanced electronics, defense technologies, electric vehicles, and even artificial intelligence infrastructure.
Trade War Flip: America Blinks First?
Once locked in a fierce trade war, the US and China have now struck a fragile compromise. Under immense pressure from its own tech and defense industries, Washington has agreed to massively ease import duties on rare earths and related components sourced from China.
This decision has triggered sharp reactions in American political circles, with some lawmakers accusing the Biden administration of “capitulating to the CCP.”
“This is not just about trade — it’s about national security. By bowing to China’s demands, we’re putting our future in their hands,” warned Senator Rick Danforth, a member of the Senate Armed Services Committee.
Why Rare Earths Matter — and Why China Controls Them
Rare earth elements (REEs) such as neodymium, dysprosium, lanthanum, and terbium are essential to producing everything from fighter jets to smartphones. China, having strategically invested in rare earth mining and refining for decades, now dictates global prices and controls supply chains from Africa to Southeast Asia.
When the US attempted to reduce dependence by hiking tariffs and promoting domestic mining, Beijing retaliated by threatening to choke off exports, causing panic among American manufacturers.
Economic Blackmail or Smart Leverage?
Chinese state media hailed the tariff cut as a “victory for fair trade,” while Western observers see it as a masterstroke of economic coercion. By using its dominance over rare earths, China has forced the world’s largest economy to bend the knee — without firing a single shot.
In a recent statement, Chinese Foreign Ministry spokesperson Liu Jianchao said:
“The United States has finally recognized the value of mutual cooperation. We welcome this policy shift.”
But critics are not buying the diplomacy spin. They argue this is part of a larger pattern of U.S. strategic retreats, especially as it simultaneously deals with multiple global crises — from Ukraine to Taiwan to its own economic slowdown.
Fallout in Washington: Tech Firms Celebrate, Hawks Fume
The immediate impact of the tariff cut has been a sharp rise in U.S. tech and EV stocks. Companies like Tesla, Lockheed Martin, and Intel had long lobbied for access to cheaper rare earths, citing supply chain bottlenecks and rising costs.
Meanwhile, U.S. defense strategists are warning that this move gives China even more leverage over critical American infrastructure in the long run.
What This Means for India
For India, this moment is a wake-up call. As the world’s major powers scramble to secure rare earths, India — which also has untapped deposits — must accelerate its own extraction, refining, and export plans. This could open the door for strategic partnerships with countries like Japan, Australia, and the EU, who are equally wary of China’s rare earth monopoly.
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