China Reveals Its Hand in Trade War, Risking Greater Isolation

The U.S.–China trade war has unfolded like a boxing match. Both sides were trading blows, and suddenly, China threw a haymaker. That’s the analogy William Lee, chief economist of the Milken Institute, used to describe the latest development in the economic confrontation between the two countries. On Oct. 9, China announced that it is tightening its export controls on rare earths, effective Dec. 1. Beijing has a near-monopoly on the critical minerals essential for modern manufacturing, from cars and electronics to advanced weapon systems. The Chinese Ministry of Commerce also unveiled export controls on battery materials, effective Nov. 8. Although China has been slowwalking its supply of rare earths to the rest of the world since April, the new measures expand its restrictions to any products that contain 0.1 percent of Chinese rare earth content or Chinese technology is used in the process....