Washington Wins Headlines, Beijing Wins the War: The Rare Earth Power Shift

The world let out a collective sigh of relief today. Bloomberg's reporting preliminary signs that tensions between the world's two largest economies are finally cooling off. But make no mistake—this détente didn't come from Washington playing nice. It came from Beijing seizing the initiative and forcing America's hand.

Why has the offensive become the defensive? Because Washington's brutal, indiscriminate approach cost it the moral high ground and strategic advantage. China anticipated the backlash, deployed countermeasures early, and watched America's overreach become its weakness.

Washington's Scorched Earth Mistake

Brutal and indiscriminate was Washington's approach —destructive measures targeting thousands of Chinese enterprises' exports without distinction. What's the “Affiliates Rule”? Economic collective punishment, weaponized at scale.

This cost America the moral high ground entirely. Trump's administration showed no restraint, no consideration for consequences—only a scorched-earth determination to destroy the other side by any means necessary.

This "collective punishment" doesn't just cut off Chinese enterprises' technological pathways—it simultaneously devastates American companies while throwing global supply chains into complete chaos. That cost Washington its credibility worldwide. Such unreasonable behavior, harming others while inflicting damage on itself.

What America didn't anticipate was that China's countermeasures came swiftly and with surgical precision—nothing symbolic about it. The rare earth card struck directly at the heart of American high-end manufacturing.

Rare earths: China's knockout weapon. Once Beijing plays the rare earth controls card, Washington needs to pull its head out of the sand as the tides shift. US Treasury Secretary Scott Bessent admitted both sides reached consensus on a trade agreement framework, stating Trump's earlier threat of “100 percent tariffs if the Chinese impose their rare earth global export controls” is “averted”. He then added that China "had threatened to put a global export licensing regime, and I believe that they are going to delay that for a year while they re-examine it."

America's Rare Earth Dilemma

With rare earths under China's control, America cannot complete its supposed "grand project" of rare earth self-sufficiency in one year. Not even close. If Washington wants stable rare earth supplies from China to keep its enterprises alive, there's a brutal negotiation gauntlet ahead. If Trump tries his "art of the deal" theatrics again, he'll find himself instantly reset to square one—April 2nd's tariff war starting line—and Beijing holds all the leverage to make that happen.

China has transformed from weakness to strength—this shift is massive. You could say it's won the fight against the entire world.

From Hand Grenades to Hydrogen Bombs

Let's dial back. On the eve of the Korean War in 1950, as Mao Zedong deployed troops and generals, he summoned Deng Hua from Guangzhou to Beijing immediately. Upon meeting, he got straight to the point: "It looks like Truman won't give up in Korea. Your task is to defend the Northeast border, but be prepared to fight the Americans, be prepared to fight an unprecedented major war, and be prepared for them to use atomic bombs. If they use atomic bombs, we'll use hand grenades, grasp their weakness, follow them closely, and ultimately defeat them."

Deng Hua responded: "Yes, grasp their weakness and fight accordingly. They fight with their advantages, we fight with ours—this is our good method for dealing with the American military." Deng Hua later served as the first Vice Commander and first Vice Political Commissar of the Volunteer Army, assisting Peng Dehuai in commanding the entire war.

"They use atomic bombs, we use hand grenades" later became a celebrated phrase—but how tragic those words were when spoken back then. Mao Zedong had to consider the worst-case scenario of America using atomic bombs against the volunteers in Korea, so he issued this order to such an important commander and political commissar—even facing a "doomsday weapon," the volunteer army must persist with hand grenades. At any cost, defend the homeland and protect the nation.

China has transformed itself completely. Forget atomic bombs and nuclear bombs—we've got hydrogen bombs now. Is that why America and the entire Western bloc fear China? No. Or that China would prevail in conflict yet again, with inferior weapons? Also no.

The Real Weapon That Changes Everything

What the US-Western bloc fully recognized in 2025 is that there exists a "doomsday weapon" powerful enough to immediately suffocate all manufacturing industries and technological development: rare earths.

Will this be deployed at any time? Here's the thing: China pursues "mutual respect, peaceful coexistence, and win-win cooperation"—it doesn't even want to use hand grenades.

Still don't believe it? This time Trump won all the headlines—China-US détente, crisis averted. If Trump manages to play nice without going from his "art of the deal" type threats to “TACO”, the Nobel Peace Prize is ripe and ready for him to take.

Deep Blue

** The blog article is the sole responsibility of the author and does not represent the position of our company. **

At the beginning of the new year, Donald Trump has single-handedly changed the United States, and the global landscape may also be reshaped. First, he declared that as Commander-in-Chief, the President’s authority is limited only by his own morality. Later, he posted an image on his social platform Truth Social with the caption “Acting President of Venezuela”. The New York Times directly questioned: “Does this mean ignoring international law and acting without any constraints to invade other countries?” Regarding international law, Trump stated, “I abide by it,” but made it clear that when such constraints apply to the United States, he would be the ultimate arbiter.

On January 7, 2026, the President signed a presidential memorandum ordering the United States to withdraw from 66 international organizations, including 31 United Nations entities and multiple major international agreements. This action is aimed at exiting organizations deemed by the White House to be “contrary to U.S. interests” and a waste of taxpayer funds. The UN bodies to be withdrawn from include UN Women, the UN Population Fund (UNFPA), the United Nations Framework Convention on Climate Change (UNFCCC), and the International Law Commission.

Clearly, Trump has a unique blueprint that serves only American interests. He might retort: “What era is this, still talking about international law and core values? Don’t you know the current state of the U.S.? Don’t you know that the U.S. has long been planning drastic actions?”

In April 2020, retired U.S. Marine Corps officer Mark Cancian proposed a bold strategy. The National Interest reported: “With a coastline of 9,000 miles and the world’s second-largest merchant fleet after Greece, including Hong Kong, China has over 4,000 ships. This is not an advantage but a vulnerability. The U.S. could effectively blockade China’s economy by launching a clever campaign, leaving it exhausted.” The suggestion was for the U.S. to emulate 16th-century Britain by supporting privateers—civilian organizations specialized in plundering Chinese merchant ships. Given China’s current military capabilities, it should be able to meet such challenges, so there’s no need to worry. Still, one can’t help but applaud the audacity of such an idea.

Back then, Biden paid no attention to this plan, as the Democrats were still refined and attached great importance to the cloak of universal values. At the same time, Biden, at least nominally, had to pay lip service to the United Nations, because ideology mattered. The U.S. had previously displayed a magical logic: attacking you to save your people, destroying your country to introduce democracy and freedom, imposing sanctions because you’re a dictatorship... Trump cannot be like ordinary advocates of universal values, who always cite international law and classical references. First, neither he nor his team possess such knowledge. Second, pretending to uphold morality can no longer maximize American interests. Third, former adversaries have “risen,” gradually establishing international moral authority. If the U.S. continues to preach benevolence, righteousness, propriety, wisdom, and trustworthiness, it will only become a laughingstock. After all, Trump has already discarded America’s credibility like trash.

Retired officer Cancian’s plan is exactly the White House’s cup of tea. For context—in the 16th century, Britain supported privateers, civilian organizations that plundered rival nations’ merchant ships. This was essentially the legalization of piracy, with the British monarch issuing “letters of marque” to recruit outlaws for royal service, dubbing them “royal pirates.” These privateers helped Britain destroy the then-dominant Spain at sea, significantly boosting British power and laying the foundation for the Industrial Revolution.

In reality, Trump has already begun “highway robbery” operations, seizing multiple cargo ships in the Caribbean. The White House has also dropped the pretense. Foreign media reported that Deputy Chief of Staff Miller recently declared: “The only permissible maritime energy transportation must comply with U.S. law and national security.” This is no different from robbery—“This mountain is my domain, these trees are my planting; if you wish to pass, leave your toll.” The only difference is that the U.S. is not just a bandit but a pirate. Similarly, Trump and Cheng Yaojin from the Dramatized History of Sui and Tang Dynasties share the title of “Chaos Demon King.”

Next, following the “Trump Gold Card,” Trump could publicly issue “letters of marque,” auctioning them to the highest bidder, and even list them on Wall Street. Their valuation might surpass that of the “Seven Sisters” oil companies—who knows?