Highlights

• China's export restrictions on rare earths function as data-gathering tools, mapping global demand and downstream dependencies rather than representing a strategic miscalculation.
• Despite U.S. tariffs and stockpiling efforts, China maintains 90% control of magnet alloy production while gray-channel exports through Vietnam and Myanmar sustain trade flows.
• Western allies remain unlikely to join anti-China coalitions due to their dependence on Chinese rare earth intermediates for EVs, turbines, and robotics manufacturing.

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In his Foreign Policy column (opens in a new tab), Carnegie Endowment fellow Alasdair Phillips-Robins argues that Chinese President Xi Jinping “may have miscalculated” by tightening export rules on rare earths, inadvertently handing U.S. President Donald Trump a strategic opening. The narrative is tidy, almost cinematic: Beijing overreaches, Washington rallies allies, and global markets reward American resilience. But the reality, when viewed through the hard geometry of the rare earth supply chain, is far less linear—and far more inconvenient for Western assumptions.

The Stagecraft of Strategy

Phillips-Robins isn’t wrong to note that China’s new export regulations—codified through China’s Ministry of Commerce (MOFCOM) _Measures on Rare Earth Management_—are sweeping and opaque. They do, indeed, make enforcement complex and invite international scrutiny. But the article misses the deeper logic of Beijing’s calculus: these aren’t mere “restrictions,” they’re data-gathering devices. Each export license application yields critical intelligence on global demand, processing capacity, and downstream dependency. That’s not a miscalculation—it’s a mapping exercise.

While Washington frames this as a trade confrontation, Beijing frames it as industrial surveillance. Control of flows isn’t just about scarcity; it’s about visibility. And visibility in 2025’s rare earth market is powerful.

Tariffs, Theater, and the Shadow Market

Phillips-Robins positions Trump’s new 100% tariffs and proposed software export curbs as evidence of U.S. leverage. Yet, rare earths are not semiconductors—stockpiles and substitution patterns blunt short-term pain. Even if the Pentagon rushes to build magnet stockpiles or fund domestic processors like MP Materials and Energy Fuels, China’s dominance endures downstream. Beijing still commands over 90% of magnet alloy production and an even larger share of metal-making know-how.

Meanwhile, the article ignores what’s happening quietly: a rise in gray-channel exports through intermediaries in Vietnam, Laos, and Myanmar. China’s “restrictions” are often less of a blockade and more of a pressure valve. These routes sustain trade flows while giving Beijing plausible deniability and leverage over pricing.

The Coalition Illusion

The author claims Xi’s broad rules could “unite the world” behind Trump. But Tokyo, Seoul, and Berlin are unlikely to join a Washington-led embargo when their own EV, turbine, and robotics sectors rely on Chinese oxides. Instead of an anti-China coalition, we’re seeing an alignment of silence—a pragmatic hedging that keeps Western firms talking decoupling while quietly buying Chinese intermediates.

What’s Actually at Stake

This is less about a miscalculation and more about a long game. China is weaponizing bureaucracy, not bombs. By making every rare earth shipment a matter of state permission, it institutionalizes dominance. Western policymakers mistake complexity for weakness; in truth, China is turning paperwork into power projection.

The real question isn’t whether Xi overplayed his hand—it’s whether the West will mistake policy theater for industrial strategy once again.

Source: Alasdair Phillips-Robins, Foreign Policy, October 24, 2025

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