China and US Rev Up Trade War with Tariff Threats and Export Controls

The trade tensions between China and the United States have escalated once again, with both nations engaging in a game of economic brinksmanship. China's latest move to impose new controls on rare earth exports has raised the stakes, and may be motivated by President Xi Jinping's need to demonstrate strength ahead of a critical meeting of Communist Party leaders.The rare earth controls, announced by China's Ministry of Commerce on Wednesday, will require exporters to obtain permits for shipments of these critical minerals, which are used in a range of high-tech products, from smartphones to missile guidance systems. The move is seen as a response to the US's recent threat to impose tariffs on an additional $300 billion worth of Chinese goods, which would effectively target nearly all of the country's exports to the US.The trade war between China and the US has been locked in a state of flux since last year's initial tariff exchanges. Despite a temporary truce in December, which allowed for a 90-day pause on further tariff hikes, tensions have continued to simmer, with both sides accusing the other of failing to meet their commitments.For Xi, the need to project strength ahead of the Communist Party's Politburo meeting, scheduled for later this month, may be a key factor driving China's tough stance on trade. The gathering is expected to focus on the country's economic development and national security, and Xi will likely face pressure to demonstrate a strong and uncompromising stance on issues affecting China's global influence.The US, meanwhile, appears undeterred by China's latest move, with President Donald Trump vowing on Thursday to "take action" if China fails to lift its export controls on rare earths. The US has long been concerned about China's dominance in the global rare earth market, which provides Beijing with significant leverage over the supply of critical components for American industries.As the trade war between China and the US continues to intensify, the global economy is bracing for the consequences. While both nations have so far avoided inflicting significant damage on each other's economies, the ongoing tit-for-tat exchanges have already taken a toll on business confidence and investment. With no clear endgame in sight, the world is watching with growing unease as the two largest economies engage in a high-stakes game of economic chicken.