Kenneth Rogoff said China is showing it has bargaining power and Trump’s current response may not be enough to deter the CCP.
News Analysis
Just as the U.S.–China trade war appeared to be easing, China suddenly imposed its toughest restrictions on rare earths, shocking the Trump administration and global markets. However, the former chief economist of the International Monetary Fund said that in its attempt to negotiate better trade terms with the United States, Beijing is attempting to emulate President Donald Trump’s negotiating style. However, he said that in this trade war, China’s use of rare earths as a trump card will severely weaken its monopoly position as countries work to find other sources.
On Oct. 9, China imposed stricter restrictions on rare earth exports. The new export control measures announced by the communist regime’s Ministry of Commerce took effect on Thursday, requiring companies to obtain special approval to export rare earth products originating in China, even if they contain trace amounts of rare earths, including products produced overseas by non-Chinese companies.
The U.S. president expressed on social media his disappointment, calling China’s new restrictions “hostile.”
“This was a real surprise, not only to me, but to all the Leaders of the Free World. … I will be forced, as President of the United States of America, to financially counter their move,” he wrote.
“There is no way that China should be allowed to hold the World ‘captive,’ but that seems to have been their plan for quite some time, starting with the ‘Magnets’ and, other Elements that they have quietly amassed into somewhat of a Monopoly position, a rather sinister and hostile move, to say the least.”
Strategic Move in Preparation for Major Negotiations
Former IMF Chief Economist Kenneth Rogoff told The Epoch Times that Beijing’s move is a strategic one, preparing for upcoming major negotiations.
“Between President Xi [Jinping] and President Trump the trade negotiations aren’t over. They’re just beginning. A real trade agreement takes two or three years to work out the details,” he said.
He said he believes that China is mimicking Trump’s aggressive bargaining strategy.
“Just before when a negotiation seems to be settled, [Trump] raises the ante, he makes new threats,” Rogoff said. “So China is taking a page out of his book and doing the same thing.”
By Jenny Li
