‘End of the Great China Gold Rush’

Divide and Conquer. That appears to be Communist China’s strategy when it comes to trade with America and the European Union, as Beijing has long sought to play one bloc against the other. Yet the Continent’s mandarins are increasingly alarmed by Beijing’s predations, including the mainland’s strong-arm tactics on rare-earth minerals, spurring talk of a Sino-European “trade war.” It would seem to behoove the transatlantic powers to collaborate.The president of the European Commission, Ursula von der Leyen, eyes “a major crackdown on subsidized Chinese imports,” Politico says, opening a debate among European Union members, some of whom want to keep the status quo. Yet Europe’s deteriorating trade position suggests the need for urgency, as low-cost Chinese products are pouring in. Europe’s goods deficit with Beijing surged to 360 billion euros in 2025 from 312 billion in 2024.“The tone is basically panic,” the head of the Brussels-based economic think tank Bruegel, Jeromin Zettelmeyer, tells the Times. “There’s a sense of imminent collapse of industry, of imminent danger.” The EU’s top diplomat, Kaja Kallas, compares the need to reduce Chinese economic influence to a course of “chemotherapy.” European leaders fear from China “an existential threat” to the Continent’s “own industries,” the Times reports.Welcome to the fight, one could well say, in light of President Trump’s efforts to recalibrate America’s trade relationship with Beijing in the aftermath of the so-called “China Shock.” After years of negotiations, America and Western nations in 2001 agreed to let Beijing join the World Trade Organization. The hope was that developed economies would benefit from trade with the mainland’s vast market as China liberalized amid closer ties with the West.These hopes failed to materialize, in part because, in retrospect, China negotiated such favorable terms as part of its accession to the WTO. Western corporations ceded intellectual property to Beijing’s state-controlled enterprises as a condition of doing business on the mainland. China preserved its system of state subsidies, and currency manipulation, enabling its manufacturing sector to capture an ever-larger share of global markets.Labor unions were among those who warned against closer ties with China. “They were right,” the Council on Foreign Relations says of those concerns, with some 6 million American manufacturing jobs lost between 1999 and 2011, at least a million of which can be traced to Chinese competition. At the same time, the collapse of, say, General Motors’ ambitions on the mainland is a signal of Western companies’ failure to thrive under Beijing’s rules.“The end of the great China gold rush,” is how Business Insider framed American corporations’ loss of “market share to China-based rivals.” American officials are weighing, if not a full decoupling with China, at least a policy of “derisking,” as Secretary Scott Bessent puts it. That policy grasps the danger of ceding too much influence to China on issues like defense-related manufacturing, high technology, and critical rare-earth minerals.A similar reckoning is under way in Europe, underscoring the logic of a concerted effort by America and the EU on curbing China’s trade tactics. Yet Mr. Trump’s recent penchant for tariffs has meant that, as the Brookings Institution’s Zack Cooper puts it, “dreams of a fully united American and European front toward China are over,” even if Washington and Brussels “have much in common when it comes to dealing with Beijing.”That mutual interest is evinced in the pact inked by the transatlantic titans on rare-earth minerals. The agreement, spanning “exploration and extraction to recycling,” per the Wall Street Journal, seeks to trump China’s stranglehold on these critical elements. The pact could mark a constructive path forward at a time when Europe and America are, Mr. Cooper reports, “more likely to cooperate out of necessity than goodwill.”

‘End of the Great China Gold Rush’

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