The Duran Podcast - Out of the blue China-US trade war. Netherlands hits China

Episode Date: October 13, 2025

Out of the blue China-US trade war. Netherlands hits China

All right, Alexander, let's talk about the rare earth announcement from China. Trump's retaliation post on Truth Social, his announcement that he will increase the tariffs on China to 100%. All of this happening over the weekend, sending the crypto market crashing, most likely sending the markets. We'll find out today. This video will be posted by the time the markets in the United States open, but people are not expecting good things from the markets today either.

All of this is happening a couple of weeks before the APEC summit in South Korea at the end of the month, where it is expected that Trump and Xi Jinping will be meeting to discuss this tariff and trade war that they have going on. So your thoughts on the rare earth monopoly of China and on Trump's attempts to counter the Chinese move. Of course, many people argue, and I believe they are correct, that this was really started by the United States. And they actually have many things in place similar to what China is doing with the rare earths. They already have these things in place against other countries, including. including China, approving companies, the regulations, export controls, all of these things.

So, I mean, this didn't just happen overnight or out of the blue, like Trump said. He said in a statement, this kind of happened out of the blue. This did not happen out of the blue. This moved from China. It didn't happen at all out of the blue. And the more we're getting, the more information we're getting about what happened, it's become increasingly clear what did, in fact, happen and why it happened the way that it did. What is true is that it was the Chinese decision to start imposing,

tightening up markedly export restrictions on rare earths, but not just on rare earths themselves, but also magnets and equipment to refine rare earths, which might be used in that way, and apparently other technology items, that it was this which triggered this extraordinary response from Trump. Now, there's been articles about this in the Chinese media now, and there's been a long article in the Financial Times. And it's quite clear what was happening, which is that back in June, after the original tariff war, the one that took place in April between China and the United States, there was a series of meetings between the Americans and the Chinese in Geneva, and there was

agreement to put this all on pause, and the tariffs were brought down again to more rational levels, and there was supposed to be negotiations underway between China and the United States with a view to achieving a long-term trade agreement. And there's been visibly on the surface a kind of, well, a certain sort of improvement in relations between China and the United States, and there's been talk that Trump and Xi Jinping will meet at the APEC summit in South Korea. The reality is that during this entire period of this pause, the United States has once again been doing what he often does, which has been salami slicing. He's been putting some restrictions on some high-tech exports here, a few more there.

There's been more pressure on some Chinese social media companies. We've had the whole business with TikTok, which the Chinese went along with, but have never been happy about. But also, fees have now been introduced against ships, merchant ships, which are built in China. They might not actually be operated by Chinese companies, but apparently the very fact that they're built in China means that they invite fees if they come to US ports, which the Chinese undoubtedly saw as an attack on their shipping, on their shipbuilding industry, which is enormous, by the way. Anyway, the Chinese clearly made a decision that they needed to bring this whole to a stop, the whole thing to a stop, and that's why they suddenly announced these very tight restrictions over the weekend. I think it was actually on Friday.

And then we had a furious reaction from Donald Trump saying that this is outrageous, it's come from the blue, how dare the Chinese do this sort of thing. they're clearly acting as a hostile, aggressive state. He then announces that he's going to impose 100% tariffs on China all over again, reigniting the trade war. Since then, he's tried to walk this back. He's had a conversation with Xi Jinping. He says this is all, all is now coming, is all beginning to become better.

And probably he will be meeting with Xi Jinping. in South Korea, after all. But we can see that beneath the surface, there's constant conflict now between China and the United States on trade, on high technology, on AI, on all of these things. And I don't think one meeting with Xi Jinping is going to patch this up. We're not looking just at a amicable divorce, which remember we talked about during Trump's first term. We are now looking You had an extremely acrimonious divorce, and the trend to that is accelerating. Well, it's an acronomious divorce, but is there anything that the United States has to counter the rare earth card that China can play?

I mean, it's rare earths. It's the processing. It's this monopoly that they have such a hold on, such control of. And I've read analysis, which says even in the best case scenario for the United States, States, we're talking the absolute best case scenario when it comes to rare earth. It could take the U.S. 20, 30 years to maybe, maybe get to an acceptable level. I mean, this is, I'm not an expert in this stuff, but my understanding of this is that China has got this locked down from top to bottom, this, from the rare earth to the processing

to the supply chain, you name it, they've got this thing completely locked down. There are a few other countries that are a little bit in the game. But interestingly enough, one of those countries is Russia. But no one is even close to the level that China is that when it comes to rare earths. And, of course, when we're talking about rare earths, we're talking about military weapons production. Well, indeed. And AI. And AI.

I mean, you're talking about the two industries that Trump probably carries. is most about. And real estate. So, I mean, there you have it. Well, indeed. I mean, this is the thing to say. I mean, as a proportion of GDP, if you're looking at this fully from a price position, I mean, rare earths, the trade in rare earths is a tiny fraction of US GDP.

But this is where GDP is a misleading indicator, because if you need rare earths to keep your military industry is going, and you need rare earths in order to develop your AI technology, especially at a time when investment in AI apparently accounts for 40% of US GDP growth, then this is a very, very serious problem. So definitely China undoubtedly has the advantage here. The United States does have some leverage over China and some things. I mean, it still provides certain food products to China. I mean, it's competing with Argentina and Brazil now on soybeans, soybean exports, but China does need to import soybeans.

The United States also supplies China with aircraft and aircraft engines. and apparently the Chinese project to build its own aircraft engines has run into snags. The new Chinese aircraft engine is not working as well as perhaps the Chinese expected, and they had to rely on help from France, and that might not be particularly reliable in the long term. So, I mean, it's not as if the US has no leverage over China at all. But long term, definitely, the Chinese are in a much stronger position because they have complete supply chains. This is something that the Chinese worked on, not just rare earths, but everything else. So they are able to keep their production going.

They still have export markets, as they have shown. They have developed more trade links with more countries. I think what the Chinese will do, being hard-headed and very practical people, is that they will use this particular incident, this episode, to drive home to Trump. Look, you have the weaker cards in this game, despite what you constantly say. This salami slicing that you've been playing against us over the last few months is completely unacceptable. Not only must it be stopped, it must be reversed. If you do reverse it, then we will relax some of these controls that we've imposed on you. But if you start this again, then we will do this again.

And in the meantime, let's see whether we can work out some kind of trade deal to try and make this divorce a more orderly plow. process than it might otherwise have been. I think that with every iteration of this process, because we've seen this happen before, it becomes more and more difficult. And it's clear to me that China and the US are now in collision. They see each other as rivals. They see each other as adversaries. In Britain, there is argument about whether China should be seen as an enemy. And leaders are what are, at least in China's case, embryonic alliances. And I think that it's going to be impossible to paper over the cracks for very much longer. And what the United States does, if it discovers that it isn't able to get rare earths from China,

what it does technologically, it's not really something I know a huge amount, about, I presume there would be a rushed program to develop refining systems and all of those things. It would certainly take time. China would move ahead as a result in some high technology areas. It would move ahead in some areas of weapons technology and production. I can't imagine that the United States would come to a total stop, but certainly China would have the advantage. No, it would not come to a stop. And it would probably rush the development and the processing of rare earths, but it's going

to come at a huge cost. And China will pull away over the next couple of years in these key industries. The Europeans are going after China. The Netherlands, I don't know if you heard about this story, the Netherlands went after the Chinese semiconductor company. And they shut it down. Well, they shut it down. They took it over.

They didn't shut it down. It probably would have been better if they shut it. I mean, when you think about it, but what the Netherlands did is they just seized the company. They took over the shares. They fired the director. They replaced the director. And they did this overnight using some obscure legal justification about the Netherlands being invaded. Then the government has a right to seize property to seize companies for national security. A very rarely used, if used at all, law that the Netherlands has on the books in case of war, in case of an invasion, which is definitely not the case with this semiconductor company.

But it does send a message to China. Keep in mind that the Europeans did the same thing to Russia, right? Germany did the same thing to gas prom. Of course, you have the Russian frozen assets. But it does send a message to China that the collective West is going to. to continue to escalate, this salami slicing that you mentioned didn't stop. And it's not only about the United States, it's maybe the entirety of the collective West. What does China do with this move from the Netherlands? How do they react to this? You know, you said it's a conflict between

the United States and China, but maybe China should take a step back and realize that this is really China and the collective West with the move from the Netherlands. In much the same way that Russia sees things, perhaps China should also adjust their frame of mind as to how they're seeing this divorce. I think they are. I think there was a time when the Chinese said to themselves, well, our relationship with the United States is deteriorating. But we are, after all, a geopolitical rival, even if we constantly pretend to them and to ourselves that we are not. We are a big powerful country.

The United States is a big powerful country. So it makes a kind of sense that, you know, the Americans shouldn't get on with us. But the Europeans are different. You know, these are trading partners. We've got good relations. We have very good relations with Germany, with very good relations with the Netherlands. We imported a lot of machine tools and high precision equipment from the Netherlands. We don't rely on them to the degree that we used to, but we do.

We did and we still have good relations. And maybe, maybe we can find some way to keep a relationship with Europe going. I think what the Chinese have discovered, just as the Russians did, which is that ultimately the Europeans do exactly what the Americans tell them in any conflict situation, just as the Europeans enthusiastically support the war against Russia. And if anything, dismayed when the Americans show that they might be rethinking and having doubts about this, the Europeans similarly enthusiastically support the conflict with China, that they always want to show to the Americans that they're part of a joint enterprise.

And I think in relation to this particular attack on this Dutch, on this company, by the Netherlands, I mean, the Chinese will see it as yet another example of salami slicing, ultimately by the United States, but executed against them by the entire collective West. We are drifting back into, well, maybe it is a multipolar world at some level, but people should not be under any doubts. Within the overall system of multipolarity, there is still also a binary conflict between the United States and the collective West on the one hand and the Chinese, on the Russians on the other. it's increasingly evolving that way, and all of the other parts of the world are going to have to reorder themselves around it. Just the final question.

I wonder if China realized that maybe they blinked when it came to TikTok. And the whole rare earth thing, I mean, I know there's a lot more to it, but maybe the reaction, the move of the rare earth export controls was in a way. for what was a way for China to maybe gain back some of the ground that they lost in TikTok. Because when you do take a step back at the whole TikTok deal, it was the Trump White House that put the squeeze on China, on BitDance. And eventually they got what they wanted, which is over time they ended up getting TikTok or at least TikTok USA.

China did give up their ground and they gave up their position on TikTok. Do you think that maybe they had to reassess things with TikTok and say, you know what? We compromise. Maybe they look at it from their side as compromise. We compromise on TikTok in the hopes that maybe this will lead to a break in the impasse that we have going on with the trade and tariff war. And it didn't. So now we have to send a much clearer message or at least send a message that we do have

leverage, you just can't take one of our prize assets, one of our prize tech social media assets from us. We do also have other interests that we will protect because they didn't protect TikTok at the end of the day. At least that's the way I see it. I don't think they protected this very valuable social media company, which to be quite honest, other countries in the world, most countries in the world, no countries in the world really have global. social media companies like TikTok was. I mean, most of them are concentrated in the United States, the social media industry. And here you had China with a global social media powerhouse, which they then handed over to Trump. Well, there is no doubt about this. This is not well received

in China. I mean, I don't obviously reach Chinese social media, but I've heard that there was an awful lot of criticism of China's weak responses, as they see it, to. what happened over TikTok. And I think if it had just been about TikTok, the Chinese government would have probably wanted to move on and say, well, that's the past. It's been a bad blow. But, you know, we have to keep going on

because the relationship between the US is still important in trade terms and economic terms and geopolitical terms for us. But what I think happened is that the loss TikTok combined with the continued salami slicing was unbearable. It was something that China felt it had to respond to. And it did. And we've seen how it's responded. And I'm sure that it will respond this way again.

Once not that long ago, I used to hear people in China say, look, the Russians, they've got all of their relations with the Americans and Europeans. completely messed up. They didn't understand how to handle the Americans. They don't understand how to handle the Europeans. We China do. We have managed to maintain a good or at least a working relationship with the Americans and with the Europeans. They're not talking like that anymore. I think they've now come to realize that you can be as accommodating as you possibly can be and the other side will still demand more. And I think that this is the stance that they're taking.

And I was reading comments by a Chinese academic who was explaining China's policy to the financial times. And he was saying that the Americans have this extraordinary sense of entitlement and arrogance and belief in their own superiority. and what China needs to do is to burst that, because otherwise, the relationship with the U.S. can never work. Just a final point. A lot of this could also be traced back to Huawei and Canada and what they did with Huawei, where they, I believe it was, was it the CEO or the CTO? It was the daughter of the owner, yeah, where they put her under house arrest or something

like that. And then we saw all the subsequent moves of basically just destroyed. Huawei in the West. I mean, they destroyed it. They're handhelds, everything. I mean, the company's now back stronger than ever. Yeah. Doesn't exist anymore. In China, it's come back stronger than ever. Not in the West. Were they accommodating on that? Do you think they were they too accommodating on Huawei? I mean, they didn't really push back on that at all. Well, well, they did arrest various people at the West. Yeah. They traded them for this. Right. They traded them for, yeah, but I'm saying on a business from

From a trade business perspective, they didn't seem to push back on Huawei. No. No. No. I mean, again, they were trying to cling on to this trade and business relationship with the West, which of course has worked very much to China's benefit over the last 30 years. Now, as I said, I think that they've come to understand that you can make whatever, however many concessions you can't, you know, you want, but ultimately, the Western powers will

always come back for more. They destroyed Huawei. They basically pushed China completely out of 5G. They're trying to stop China developing AI technologies and all of that, because they see China as a rival. There's talk continuously at the West about China preparing for war, in 2027. I didn't where that came from, but anyway, that narrative is all over the place. Certainly here it is in Britain. And, I mean, in Britain, I mean, you talked about what's happened in the Netherlands. There's been an admittedly unsuccessful prosecution of two alleged Chinese spies in Britain. I mean, it's impossible any longer, I think, for China to have any real doubts that this relationship is collapsing. And as I said, we're going from an

amicable divorce to an acrimonious one. And there is, I mean, you know, they're having to respond, and they did so over the weekend. What do you make of the response from the West, which is that all these moves are done because China is using this technology, whether it's TikTok or Huawei to spy? They're abusing their position and stealing secrets and innovations. What do you make of those? And that's why we have to take these measures against China. Well, perhaps, but then, of course, we do exactly the same.

We all know that we do. I mean, I would argue that if you're talking about using social media and social media companies and tech companies as a geopolitical tool, well, the West does this on any measurely greater scale than China has ever done. I mean, I cannot think of a single color revolution. that China has sponsored in any country, which has been operated through the medium of a Chinese social media company. I don't know if one.

So we are accusing China of doing all of these things, which we do ourselves. And as for China using all this technology in order to spy on us, perhaps it does. But I haven't seen much evidence of this. I haven't seen any real evidence of this. and it does come, you know, rather strange from the people who were, you know, listening in to Angela Merkel's phone conversations. Yeah. All right. We will end the video there.

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