Over the weekend, Washington and Beijing traded threats and countermeasures: the White House floated a potential 100% tariff on Chinese goods while China signaled retaliation including new port fees and export controls on rare earths and a widening "unreliable entities" list.
Concrete steps: Beijing has already expanded restrictions on some exports and added firms to its blacklist, moves that will complicate specific supply chains — rare earths in particular matter for high‑tech and defense supply chains.
Political economy: China appears to be rerouting trade away from the U.S.; shipments to the U.S. plunged while exports to other regions grew, undercutting the assumption that cutting off American consumers alone would force rapid concessions.
So what: tariff escalation still carries real costs — higher input prices, disrupted supply lines and uncertainty for multinational firms — but current data suggest the immediate leverage of U.S. unilateral tariffs is more limited than the White House anticipated.
