China Does Not Want a Trade War – The Case for Rare Earth Elements

Abstract

The aim of this paper is to evaluate China's growing geopolitical importance through a brief overview and an analysis of the US-Chinese relations after World War II. After a brief historical insight into the US trade policy, the most probable theoretical explanations leading to a U-turn in trade relations with most of the world are summed up. Thirdly, we aim to revaluate China's geopolitical weight in light of the recent trade war, and finally further sophisticate the analysis through a case study of the market of rare earth metals and compounds. The conclusion is drawn that we might be approaching a new milestone in the hegemonic transfer but we have certainly not yet arrived at a turning point. Journal of Economic Literature (JEL) codes: F02, F13, Q34