But his secret intention all along was to isolate China, apparently. Other countries ended up with lower tariff penalties while China alone is slammed with a prohibitive 145 per cent tariff on all exports to the US ...
... According to Xi, it’s the US that has isolated itself by putting a tariff wall around the American economy, alienating every US ally and friend in the process. This week, Xi is embarking on a charm offensive of South-East Asia to emphasise the contrast between China’s stability and America’s destructive erraticism.
Who’s right? First, remember what Deng Xiaoping said. The father of modern China’s economic success observed that: “The Middle East has oil. China has rare earths.” ...
... Despite their name, rare earths aren’t rare at all. But concentrated, high-grade deposits are hard to find. The US isn’t well-endowed. It has only about 1 per cent of known economic reserves. ...
... So Xi’s new export ban is a potential boot on the throat of US manufacturing, medicine and military capability. Beijing is working out a detailed export licensing system so that it can resume exports with tight control over who gets what and when.
Does Donald Trump understand America’s vulnerability? Yes, that’s why he’s put a very public priority on shaking down Ukraine and Greenland for their rare earths deposits.
But he might not realise that it would take as long as 10 years for any of them to be developed into functioning mines. And his grasp of the detail might not be strong – in one extended set of remarks he repeatedly called them “raw earths” ...
...“The Trump administration may think it’s acting tough, but it’s, in fact, putting the US economy at the mercy of Chinese escalation. The US will face shortages of critical inputs ranging from basic ingredients of most pharmaceuticals to inexpensive semiconductors used in cars and home appliances to critical minerals for industrial processes including weapons production.” ...
... As world trade rearranges itself around America’s self-imposed tariff wall, it will be the US, not China, that finds itself isolated.
Trump said last week that he was making tariff decisions “instinctively”. Information? Expertise? That’s for wimps. Trump explained in his first term the source of his unique insight: “My gut tells me more sometimes than anybody else’s brain can ever tell me.”
Peter Hartcher is political editor and international editor of The Sydney Morning Herald and The Age.