Paul, thanks for the reply here. I often enjoy our exchanges, online and in-person, so please see this in that spirit.

I do think much of what you have written is misleading, incomplete, or in some cases, inaccurate.

To begin, a general point. You dismiss others and appeal to your own authority by stating you are "in the trenches" on this issue. By that, do you mean you're actively helping clients secure licenses from MOFCOM, as you've mentioned elsewhere? If that's the case, I do wonder whether your analysis essentially defending MOFCOM here is at all shaped (even implicitly) by your need for continued MOFCOM access. Doesn't mean you are wrong, but since you're the one who raised the point, it warrants clarification.

On the substance, a few points:

(1) You claim, as always, that the Chinese decision to play the rare earths card wasn't about Trump but was about Biden. But a few replies.

(A) It's true China built the licensing regime over time beginning in 2020 (beginning under Trump), but it's also true they did not pull the trigger until Trump's liberation day tariffs in 2025. In fact, their April actions came two days after those tariffs, and they were in the same package as the 34% retaliatory tariff. This was about tariffs, and later, the affiliates rule.

(B) Under Biden, China never threatened to cut off rare earths to the entire US or global economy. They did so only under Trump because he took tariffs to 145% and they were backed into corner. Even now, Beijing officials indicate it was a hard decision they made in the moment. By the way, many admit it was modeled off our sanctions and not export controls because it targeted something so fundamental.

(C) It is true China took some rare earth actions in response to semiconductor controls under Biden. But you know well there is absolutely no comparison between the limited controls they took under Biden and the massive, globally disruptive ones they announced under Trump. The scale of licensing slowdown is wholly different, too.

(2) I suspect the reason you keep saying China's rare earths actions in 2025 were about Biden and not Trump is because you want to undercut the case for US export controls on semiconductors. It seems like motivated reasoning since you and your clients oppose those controls. Separately, your claim that the controls don't work, which was empirically questionable earlier, is particularly thin today, when we've learned that the Chinese government ran an espionage operation against Nvidia's CEO to undercut that same policy.

(3) Your framing treats the PRC's rare earth leverage as a reaction to others. Let's retire this idea. Jessica's piece, in my view and as I've argued elsewhere, is incomplete here. It is true that Beijing didn't plan weaponization in the 1980s and 1990s, but they then did so in the late 2000s ahead of its deployment against Japan. They then used it in 2010 against Japan. They even say so in primary sources. The idea that the formal regime was built beginning in 2020 doesn't detract from the idea they were already applying this tool earlier.

(4) Your oddly spirited defense of China’s non-compliance at Busan rests on two claims: that “we still do not know what China agreed to do,” and that Beijing only had to issue licenses under its own regulations, meaning Busan just required it to hold off on the October controls but allowed it to keep going on the April regime. Both are questionable responses. The basic bargain was clear: China suspended its October controls in exchange for lower US tariffs and suspension of the Affiliates Rule. Interestingly, the US fact sheet also said China agreed to issue general licenses for rare earths and other critical minerals to US end users and their suppliers worldwide, and Beijing didn't deny that. You say the current case-by-case throttling is just fine, but it's contrary to a general license which would mean blanket authorization. Notably, Beijing's actions disconfirm your interpretation. Weeks after Busan, as you well know, MOFCOM began issuing a new category of general licenses to magnet makers, replacing case-by-case approvals. Why create a new licensing channel if the deal only meant returning to the post-April status quo? It's a bizarre reading to say China's April actions were totally off the table: it makes sense only if you now are trying to justify Beijing's non-compliance.

(5) Nor has Beijing delivered on October. MOFCOM’s suspension of its October controls expires November 10. The US says the truce runs to January 10, but Beijing has published no extension to January 10, and we're coming up on the deadline in two days. If China considers itself bound, it should say so in writing, right? The fact it hasn't is interesting.

(6) You bring up military end use, but you know (from your own clients) as well as I do that Beijing isn't just throttling military end users. You then say it's a pipe dream to go back to pre-April 2025. Perhaps, but that isn't really the point. The point is that China isn’t delivering what it agreed to at Busan.

(7) I did say “US companies are not getting licenses.” But if you read the context, you'd know I didn't mean an absolute ban was in place but rather that some companies are struggling to get them, which is why export volumes are down (you and I are in fact cite the same figures here). I think you cherrypicked for a cheap shot reply and didn't look at the whole context.

(8) It is odd that you claim that the US backlog of licenses justifies China violating the Busan agreement. That backlog was not part of Busan. It's quite a reach to justify Beijing's non-fulfillment of Busan by pointing to a third issue that was longstanding.

(9) You disputed my claim that China's Busan non-compliance poses serious risks to the US economy while the US backlog on licenses (which is not relevant for Busan) is not existential for China's economy. You dispute it with two points, both which are dubious.

(A) The first thing you do is say that the licensing backlog may in fact be existential for Chinese companies. You do not prove this, and even if it were true for some companies, the backlog does not directly target a massive segment of the entire economy like manufacturing. Put differently, the United States has no licensing block on something as elemental as rare earths. And as for your points on chips, the United States has in fact licensed billions in chip exports to China. None of this should matter though, because the licensing backlog at Commerce was not part of Busan.

(B) The second claim you make, after saying China faces big threats from our licensing backlog, is to say the US does not face a major economic disruption from China's rare earth controls. You argue rare earths access is not a gun to the head of the US economy, and instead of showing why that is true, you simply say it is too complicated to explain and we should take your word for it. This is a bizarre claim: no one else, not Beijing, not Washington, and not industry would agree with you. Moreover, Beijing understands this is serious leverage and that’s why it used it. Just consider that several high-employment manufacturing sectors, autos above all, faced shutdowns last year. You say the US economy is mostly services, so who cares? That's quite an argument! Even a services economy can’t absorb mass plant closures from a shortage of rare earths, and manufacturing isn't a trivial sector (probably at least 10% of GDP). Indeed, the fact this mattered is the very reason there was a Busan deal in the first place.

In sum, I don't find much of what you wrote accurate or compelling. And I do think the proximity to the issue you enjoy, far from being validating, raises questions.

I'll end there.