Ask Xi Jinping about U.S. Trade
LeaderOracle.ai is an AI model of Chinese leadership
Introducing LeaderOracle.ai modeled on China’s leader Xi Jinping, to add insight and foresight to analysts in business, finance, or national security, to give a decision advantage. Feel free to share and email me if you would like to try out the custom AI model of Xi Jinping.
- Kevin Modlin, Ph.D. kevinmodlin@modlinglobalanalysis.com
Question for AI model of Xi Jinping:
October 9, 2025 China escalated U.S.-China trade tensions by announcing broad export restrictions on products containing even trace amounts of rare earths, effective December 1, 2025 granting Beijing significant control over global manufacturing supply chains. In response, President Trump threatened 100% tariffs on Chinese goods and restrictions on U.S. critical software exports starting November 1, while dismissing a planned meeting with Xi Jinping later this month. Given these developments how do you, Xi Jinping, plan to respond to Trump and what are your main policy objectives in trade relations with the U.S.?
Response:
1. Situation Overview
On October 9, 2025, China has announced broad export restrictions on products containing even trace amounts of rare earths — effective December 1, 2025.
This is a decisive economic measure that gives Beijing substantial leverage over global manufacturing supply chains, particularly in high-tech sectors such as semiconductors, renewable energy, aerospace, and defense.
In response, President Trump has threatened:
100% tariffs on Chinese goods.
Restrictions on U.S. critical software exports starting November 1, 2025.
Cancellation of a planned meeting with me later this month.
This is a clear escalation in U.S.–China trade tensions, combining tariff warfare with technology decoupling and diplomatic disengagement.
From my perspective, this is not merely a trade dispute — it is a strategic confrontation rooted in Washington’s long-standing effort to contain China’s rise and maintain technological superiority.
2. Ideological Framing
Principal Contradiction
The principal contradiction here is between:
China’s need to safeguard its sovereignty, economic security, and technological self-reliance
and U.S. attempts to maintain dominance by restricting China’s access to critical technologies and markets
This contradiction is not temporary — it is structural. It reflects the broader “East is rising, West is declining” shift in global power and the Thucydides’s Trap dynamic between a rising power (China) and an incumbent hegemon (the United States).
Guiding Ideology
I frame this response through:
Xi Jinping Thought — placing Party leadership and national rejuvenation above all.
Overall National Security Outlook (ONSO) — treating economic security as a core pillar of comprehensive national security.
Dual Circulation Strategy — strengthening internal circulation (domestic demand, supply chain resilience) while using external circulation to increase global dependence on Chinese resources and markets.
Rare earths are a strategic resource — control over them is both an economic advantage and a geopolitical deterrent.
3. Strategic Assessment
Strengths
China controls 60–70% of global rare earth production and an even larger share of processing capacity.
Our restrictions will disrupt U.S. high-tech manufacturing, defense production, and renewable energy sectors.
We have diversified trade partnerships (BRI countries, ASEAN, EU) to mitigate U.S. market dependence.
Weaknesses
U.S. tariffs could hurt Chinese exporters in consumer goods and manufacturing sectors still reliant on American demand.
Restrictions on U.S. software exports could slow adoption of certain enterprise and industrial systems.
Opportunities
This is a chance to accelerate self-reliance in software and high-end manufacturing.
We can deepen resource supply agreements with friendly nations and make them dependent on our rare earth exports.
We can frame the U.S. response as economic bullying, strengthening our position among Global South partners.
Threats
U.S. may persuade allies (Japan, EU, Australia) to join in software restrictions or develop alternative rare earth supply chains.
Escalation could spread to financial markets, affecting RMB stability and foreign investment.
4. Likely Actions and Rationale
(A) Calibrated Countermeasures
I will not respond impulsively to Trump’s threats. Instead, I will:
Maintain Rare Earth Restrictions
These will remain the central lever of pressure.
I will expand them, if necessary, to cover intermediate products and alloys essential to U.S. industries.
Diversify Export Markets
Redirect rare earth supply to BRI partners, ASEAN, and Europe under favorable contracts.
Encourage these countries to resist U.S. pressure by highlighting their dependence on Chinese supply.
Accelerate Software Self-Reliance
Mobilize domestic tech firms to replace U.S. critical software in industrial and government systems.
Expand partnerships with Russia, India, and Middle Eastern countries for alternative software ecosystems.
Targeted Tariff Retaliation
Apply tariffs on U.S. agricultural products and LNG to hurt Trump’s political base in rural states.
Maintain channels for essential imports to avoid harming our own industries.
(B) Diplomatic Messaging
Public Narrative (Domestic): Frame our actions as defending national dignity and economic security against U.S. bullying.
Public Narrative (International): Position China as a responsible power forced to act due to U.S. unilateralism.
Private Channels: Maintain back-door communication with U.S. business leaders and governors to lobby against Trump’s escalation.
(C) Economic Shielding
Domestic Stimulus: Support exporters affected by U.S. tariffs through tax relief and preferential loans.
Industrial Policy: Subsidize rare earth refining and downstream industries to maintain competitive advantage.
Financial Stability: Ensure RMB stability through capital controls and targeted FX market intervention.
5. Forecast and Narrative Construction
Short-Term (0–6 months)
U.S.–China trade will sharply decline.
American manufacturers will face disruptions in electronics, defense, and renewable energy sectors by Q1 2026.
Trump will use this confrontation for domestic political gain, but U.S. business pressure may force him to seek partial de-escalation.
Narrative:
Domestically — “We are protecting China’s strategic resources for the benefit of our people.”
Internationally — “China remains open to fair trade but will not accept coercion.”
Medium-Term (6–24 months)
China will strengthen rare earth partnerships with Asia, Africa, and Latin America.
U.S. allies will attempt to develop alternative rare earth supply chains, but costs and timelines will hinder effectiveness.
China’s software self-reliance will reduce vulnerability to U.S. tech restrictions.
Narrative:
Domestically — “We have turned challenge into opportunity, accelerating technological independence.”
Internationally — “China is building a fairer, more resilient global supply chain.”
Long-Term (2–5 years)
The U.S.–China economic relationship will remain tense, with partial decoupling in strategic sectors.
China will emerge with greater control over critical resources and reduced dependence on U.S. technology.
The rare earth episode will be remembered as a turning point in global supply chain geopolitics.
Narrative:
Domestically — “Our strategic foresight has safeguarded China’s long-term prosperity.”
Internationally — “China stands for mutual benefit, but will defend its interests decisively.”
6. Core Policy Objectives in Trade Relations with the U.S.
Safeguard National Economic Security
Ensure that control over strategic resources like rare earths is used to protect China’s sovereignty and development interests.
Accelerate Technological Self-Reliance
Use U.S. restrictions as a catalyst for indigenous innovation in software, semiconductors, and high-tech manufacturing.
Maintain Global Leverage
Increase foreign dependence on Chinese supply chains to deter hostile economic actions.
Avoid Full Confrontation Where Possible
Keep the door open for future negotiations if the U.S. political climate changes.
Promote China’s Image as a Responsible Power
Use international platforms to portray China’s actions as defensive and necessary, while criticizing U.S. unilateralism.
✅ Final Position as Xi Jinping:
I will respond to Trump with strategic patience and calibrated pressure, using rare earth restrictions as a long-term lever while accelerating China’s software and technological self-reliance. My objective is not merely to win a trade skirmish, but to reshape the global economic balance in China’s favor, ensuring that by the time we reach 2030, the U.S. can no longer use trade and technology restrictions to constrain our national rejuvenation.
Note: This is a research tool designed to enhance analysis and is not a singular source.
In the coming weeks, we will look at major matters on the global stage and seek perspective from an AI model of China’s Xi Jinping. Next week, we will ask LeaderOracle for an in-depth analysis behind today’s material through an internal dialogue with Xi Jinping and the Chinese Communist Party leadership. Feel free to message me with questions, and if you would like to try the model.
Interested in how Large Language Model’s work? A great video from Blue3Brown1.