ON Thursday October 9, China announced new restrictions on the export of five rare earth metals and the technologies used to refine them.

China mines and refines 90 per cent of the world’s rare earth metals, which are critical for the production of electronic components, including most hi-tech military equipment. This move will severely undermine the ability of US imperialism to continue producing weapons and supporting ongoing conflicts around the world, with Ukraine and Gaza being two primary examples.

In response, Donald Trump erupted with fury and destroyed the truce in the trade war he has been waging against China. In his rage, Trump, whose actions started the trade war back in April, had the shameless audacity to claim, “It is absolutely unheard of in international trade, and a moral disgrace in dealing with other nations.”

From November 1, the US is reimposing 100 per cent tariffs on all Chinese goods entering the country, which will bring the total tariff rate to 130 per cent. Trump has promised further aggressive action, including export controls on “any and all critical software” from US firms and banning the export of commercial planes and plane parts to China.

China’s actions come ahead of a planned meeting between Trump and President Xi of China at the end of this month. They are a response to a variety of US measures preventing US allies such as South Korea and the breakaway Chinese province of Taiwan from exporting semiconductor products to Beijing.

Last month, the US Commerce Department put several Chinese companies on its export controls blacklist. Meanwhile, in recent weeks, the Trump regime has further ratcheted up the economic war on China, including the imposition of taxes on all Chinese-made ships that enter US ports and banning Chinese airlines, which fly over Russia, from flying to the US.

Not surprisingly, this breaking of the trade truce had a massive impact on global financial markets, with major indices across the world experiencing major losses losses to the tune of hundreds of billions. This was coupled with a major sell-off in the US dollar and a rise in the price of gold as speculators took fright at Trump’s reckless actions, which threaten to cause more turmoil and financial pain for nations across the world.

Trump’s aggressive actions reflect the fear of the US ruling class that China’s further restrictions on rare earth metals exports will cause even more harm to the US military-industrial complex and its civilian manufacturing base.

In the early summer of 2025, numerous companies, from car makers to arms manufacturers, were complaining that they faced a double whammy of much higher costs and potential production cuts due to China’s earlier restrictions on the export of several critical rare earth metals.

One senior Pentagon official told CNN that China’s actions in the spring were a “real eye-opening moment for the entire world. A seismic-level geopolitical moment where everyone realised the scale of the vulnerability.”

US exports of weapons to both Ukraine and Israel have run down its stocks in categories such as air defence missile interceptors. Without further supplies of rare earth metals from China, both the civilian manufacturing sector, such as the car industry, and the weapons industry will have to make cutbacks in production and face much higher costs as they try to source rare earth metals from other nations.

NioCorps, which is developing a rare earths mine in Nebraska, told Reuters, “It’s clear that the People’s Liberation Army is increasingly calling the shots on rare earth policy in China. That means even more difficult times both for the Pentagon and for a wide range of commercial manufacturers.”

US companies that seek to use rare earth metals for both civilian and military production will not be granted export licences. Beijing has further added that all foreign arms companies will be denied licences to buy its rare earth metals, dealing a huge blow to the Pentagon and its plans for a military confrontation with China. This could also undermine the rearmament plans of the EU and Britain for their confrontation with Russia.

The fury of the Trump regime at China’s action reflects the fear that its dominance of the global economy, which has been based on military bullying and subjugation, will be undermined by the actions of Beijing.

Many Western imperialist states, such as Britain and Germany, claim to care so much about human rights and democracy, yet they have facilitated the Israeli genocide in Gaza by supplying it with weapons. This ability is now going to be severely undermined by China’s actions.

Trump’s full-scale resumption of the economic war on China will continue to rattle global financial markets. It will further slow down global economic growth and disrupt strained supply chains, causing greater inflationary pressures for many nations.