Last Friday, China announced sweeping new restrictions on the export of rare earth metals and other critical materials—a move that reportedly infuriated Donald Trump and his administration. It is clear that with these actions, Beijing is signaling that it is not a "punching bag" and that the United States is not the only country capable of issuing threats and ultimatums. These restrictions suggest China's intention to strengthen its position in the ongoing trade war, ahead of the highly anticipated meeting between Donald Trump and Xi Jinping scheduled for later this month.

In a formal statement, China's Ministry of Commerce said that foreign exporters using even trace amounts of Chinese-produced rare earth elements will now require an export license, citing national security concerns. A separate press release stated that certain equipment and technologies used in processing rare earths and manufacturing magnets will also be subject to export controls. It is still unclear how China plans to enforce these comprehensive new rules, but the move mirrors existing US export controls, which bar Chinese companies from accessing advanced semiconductor chips and production equipment.

Exports of rare earth metals are a cornerstone of the global supply chain on which high-tech manufacturing depends. These elements are essential for producing chargers, magnets, and other components used in electronics, solar panels, and electric vehicles. Since China dominates the global supply of these resources, its restriction policy has immediately raised serious concerns in the United States and elsewhere.

Trump and his administration appeared ready to respond, announcing plans to impose 100% tariffs on all Chinese goods. This sharp escalation in the trade war was underscored by Trump's own statements, framing Beijing's actions as an attempt to interfere with the US economy and a threat to national security.

With the upcoming meeting between Trump and Xi Jinping approaching, expectations for a diplomatic breakthrough are increasingly uncertain. On the one hand, both sides may reach an agreement and attempt to find common ground to avoid further escalation. On the other hand, if the environment proves too tense, the situation could lead not only to additional tariffs but also to broader economic consequences for both countries.

Beijing is clearly highlighting its leverage and signaling its readiness to resist pressure, demonstrating that its countermeasures could carry serious political and economic consequences.

Later, China's Ministry of Commerce separately announced new plans to expand its export controls to additional products under measures set to take effect on November 8. The list includes five more rare earth metals—holmium, europium, ytterbium, thulium, and erbium—as well as lithium-ion batteries, graphite anodes, synthetic diamonds, and certain equipment used in the manufacturing of these materials.

The currency market responded to these developments with a drop in the U.S. dollar and a rise in several assets, including the euro and British pound.

Regarding the current technical picture for EUR/USD, buyers now need to focus on breaking above the 1.1630 level. Only then will a test of 1.1660 become a realistic objective. From there, the pair could attempt a move up to 1.1690, though doing so without the support of large institutional players would be quite difficult. The furthest target stands at the 1.1720 high. In case of a downward move, serious buying interest can be expected only around the 1.1590 area. If support is absent at that zone, it would make sense to wait for a new low at 1.1545 or look to open long positions from 1.1510.

As for the current technical setup for GBP/USD, pound buyers must break through the immediate resistance at 1.3360. A successful breakout would open the path to 1.3390, above which further gains will be difficult without strong market momentum. The furthest upside target is the 1.3425 area. If the pair declines, bears will likely attempt to reclaim control at the 1.3330 level. A clear break below that range would significantly weaken the bulls' position and push GBP/USD toward the 1.3290 low, with the prospect of extending the fall to 1.3260.