As global trade tensions intensify, the United States has identified India as a strategic ally in its escalating confrontation with China over rare earth exports—the critical minerals that power everything from electric vehicles to defense technologies. U.S. Treasury Secretary Scott Bessent took aim at Beijing, accusing China of “weaponizing supply chains” by imposing export controls on these crucial minerals.
“This is China versus the world,” Bessent declared in a recent interview, emphasizing Washington’s intent to rally global democracies—including India and key European partners—to safeguard industrial autonomy from Beijing’s influence.
In a strongly worded statement to Fox Business, Bessent accused China of threatening the foundation of global industry: “They’ve pointed a bazooka at the supply chains and the industrial base of the entire free world. And we’re not going to have it.”
The U.S. Treasury chief added that America would assert its sovereignty “in various ways,” signaling a tougher trade posture and expanded coordination with allies. Bessent’s language underscores a sharp escalation in rhetoric, reflecting Washington’s frustration over what it sees as Beijing’s attempt to dominate the world’s rare earth market.
Trump’s Tariffs Deepen the Divide
The renewed tensions follow former President Donald Trump’s announcement of 100% tariffs on Chinese imports, a retaliatory response to China’s latest export restrictions. Trump’s move triggered alarm across global markets and rekindled fears of a full-blown U.S.-China trade war, just when relations appeared to be stabilizing.
Trump, while reiterating that he “wants to help China, not hurt it,” accused Beijing of “exporting its way out of a depression” and warned that the U.S. would no longer tolerate unfair trade practices. His administration is also reviewing a planned meeting with Chinese President Xi Jinping at the upcoming APEC Summit, hinting that diplomatic dialogue could take a back seat to economic confrontation.
India’s Balancing Act Between Two Superpowers
Caught between Washington’s expectations and Beijing’s sensitivities, India now finds itself at the center of this unfolding global trade chessboard. While the U.S. sees India as a vital partner in countering China’s dominance over rare earth minerals, New Delhi remains cautious.
Prime Minister Narendra Modi’s recent outreach to Beijing, aimed at stabilizing ties after years of tension along the border, highlights India’s delicate position. Despite this, Bessent’s remarks indicate that Washington expects India’s participation in securing critical mineral supply chains, positioning it as a cornerstone in the emerging “China vs the World” trade dynamic.
Signals From Washington to New Delhi
Even as Trump lauds Modi as a “great leader” and a “good friend,” India continues to face 50% U.S. tariffs, complicating the path to deeper cooperation. The contradictory stance—praise alongside pressure—mirrors the volatile nature of Trump-era diplomacy, where trade protectionism and strategic alliances coexist uneasily.
At the Gaza Peace Summit in Egypt, Trump’s praise for Pakistan raised eyebrows in New Delhi, though he later balanced it with warm words for Modi. This back-and-forth underscores the unpredictable rhythm of U.S.-India relations under Trump’s renewed leadership.
The Trade Deal Still on the Table
Despite the turbulence, Delhi and Washington are pushing ahead with negotiations on a long-discussed Bilateral Trade Agreement (BTA). Five rounds of talks have already taken place, with another scheduled this week as Indian officials head to the U.S.
A senior Indian negotiator confirmed that the first phase of the deal is expected by late 2025, though progress has been slow due to repeated tariff disruptions. Both sides remain optimistic that the agreement could reset trade dynamics and shield future cooperation from political headwinds.
Global Stakes: The Rare Earths Power Play
China remains the world’s dominant producer of rare earth elements, controlling over 70% of global output. Its recent export restrictions have already sparked price spikes and supply fears in sectors such as defense, electronics, and renewable energy.
For the U.S. and its allies, building an **alternative supply chain network—with India as a critical hub—**is now both an economic and strategic imperative. As Bessent put it, this is no longer about trade alone but about “protecting the free world’s industrial future.”
