Keith Bradsher

European and American companies are frantically searching for ways to buy more from Southeast Asia, from India, and from elsewhere.

Hmm.

So there is a long-term interest in China in not taking this too far.

In fact, it's already gone far enough that they are worried in China that they may be losing their appeal as a destination for foreign investment.

Who wants to build another factory in China if you're not going to be able to send the goods from that factory out of China?

That is exactly right.

China is not backing down in any way.

China is all in on restricting rare earths.

That's a risky position to be in when you're a country like China that lives on exports, even as the domestic economy is a mess.

So China may have overplayed its hand.

It's possible the US has overplayed its hand, but the US is in a very difficult position because China has enormous overcapacity of factories.

And just last Thursday, we had a pivotal moment.

The Central Committee of the entire Communist Party said, we're going to double down on manufacturing.

We want to be the country that makes everything.

And that is a direct challenge to the United States and Europe, which still have some manufacturing sectors, and to Japan and to South Korea.

This emphasis on making practically all kinds of advanced technology is really a worry.

And so the United States is on the spot now.

Does it take a short-term strategy of accepting a deal that gets it back to where it was at the start of the year?

but risks further deterioration of what's left of the American manufacturing sector?

Or does it continue to have a confrontation, but that could be very painful?