The economic clash between the world’s two biggest powers just escalated — and this time, China is swinging back hard.
In a stunning move, Chinese leader Xi Jinping unleashed a series of retaliatory steps aimed directly at the U.S. economy. And it goes far beyond tariffs.
Rare Earths Cut Off, Tech Industry Feels the Heat
China has stopped the export of seven key rare earth elements, including dysprosium and yttrium.
These materials are critical for electronics, electric cars, aircraft, and defense systems. With China holding a near-monopoly, this decision could paralyze key sectors in the U.S.
Boeing in Trouble as Orders Frozen
China didn’t stop at minerals. Xi’s administration has ordered Chinese airlines to halt all Boeing plane purchases.
Even American-made aircraft parts are now off the table.
For Boeing, already battered by past scandals and supply chain woes, this freeze is another heavy blow.
Hollywood Gets the Cold Shoulder
Beijing is also cracking down on American pop culture.
New restrictions on Hollywood films entering Chinese cinemas could cost major studios millions.
Although U.S. movie revenues have dropped in China in recent years, the symbolic move underscores growing hostility.
Verbal Attacks Match Economic Ones
The language has become just as sharp. Senior Chinese official Xia Baolong recently mocked “peasants” in the U.S., saying Americans will “soon bow before China’s 5,000-year-old civilization.”
The message from Beijing is clear: China will not fold.
Trump’s Tariff Reversals Show Pressure
President Donald Trump, who started the trade war, already began to scale back some tariffs.
Facing backlash from rising consumer prices, he lowered duties on electronics — including iPhones — to avoid a major retail revolt.
Apple, for example, produces over 80% of its smartphones in China. Any disruption could drive prices above $3,000 per phone.
Drug and Appliance Markets Also at Risk
Beyond phones, America relies heavily on China for medicine.
Up to 80% of active ingredients in drugs sold in the U.S. come from China or India. If China tightens the flow, health care costs could spike.
Air conditioning units also present a problem. With 80% built in China, Trump’s tariffs could make staying cool this summer far more expensive.
Experts Split Over Who Has the Edge
Trump’s Treasury advisor Scott Bessent argues China has more to lose.
His logic: China exports five times more to the U.S. than it imports.
But economist Adam Posen disagrees. He says China wins because Americans need what it sells.
“America wants what China makes,” Posen concluded.
Trade War Leaves U.S. Vulnerable
Right now, only 14% of China’s exports go to the U.S. That makes it harder for Trump to hit where it hurts.
And with his zigzag tariff strategy, analysts believe he’s already pulling back.
According to the Financial Times, recent exceptions signal a slow retreat. More rollbacks may come soon.
Is China Winning?
That’s the question haunting Trump’s team.
While the White House talks tough, inflation creeps higher, and Beijing shows no sign of backing down.
The long game might favor the side with cheaper goods and stronger supply chains.
