"The U.S. Constitution defines the president as the Commander in Chief. It is a solemn and grueling responsibility. It broke Lyndon Johnson, turned Barack Obama's hair gray and accelerated Joe Biden's decline into dotage. Many voters ultimately cast their votes for the candidate who is the more plausible Commander in Chief. I was one of many who struggled to imagine Kamala Harris in that role.
Say what you like about Donald Trump, commanding comes naturally to him. Not only does he thrive on the job's relentless demands. He goes further. He has emerged this year as the Disrupter in Chief.
His "Art of the Deal" approach -- the outrageous opening bid, then the wheeling and dealing -- has delivered transformational results at home and abroad in the space of nine months, with this week's Gaza deal even briefly shutting up his legion of critics.
But how far Trump's winning streak continues depends heavily on how he handles what is by far his greatest challenge: an increasingly assertive China led by a no less ambitious disrupter.
"Democracy," H.L. Mencken famously said, "is the theory that the common people know what they want, and deserve to get it good and hard." Well, Trump has given it to American voters good and hard this year. They wanted immigration restriction. They got it with breathtaking speed. Net migration to the U.S. averaged 2.6 million people a year under Joe Biden, according to the Congressional Budget Office, but will shrink this year to just 400,000, thanks to closure of the southern border and an aggressive new deportation drive. Estimates by AEI and my own firm put the net migration figure for 2025 even lower, at zero or even in negative territory.
Voters were mad at Joe Biden over inflation. Consumer price inflation was 2.9% in August, slightly down since Trump was sworn in and a third of the rate we saw in the summer of 2022. Oil prices are down 23% since Inauguration Day. Even raising the average tariff rate to a height not seen since 1934 has barely caused inflation to rise.
As for the woke mania that swept through U.S. higher education like a mind virus over the past decade, Trump has gone after it with a bazooka. I don't love to see the federal government intruding in the governance of universities. But in forcing change that was never going to happen spontaneously, Trump's bazooka is looking more effective than Elon Musk's chainsaw was against the federal bureaucracy.
In short, no president has delivered so rapidly on so many of his campaign pledges. It's not just the 217 executive actions in 100 days; it's the stream of social media "truths" and the almost daily exchanges with the press corps. If you wanted a "vibe shift" last year, you really got one. If you hate Trump, maybe you just hate the times we live in. For Trump is the zeitgeist on a golf-cart.
The problem, as Mencken implied, is that voters don't really want their wishes fulfilled "good and hard." According to the RealClearPolitics polling average, Trump's net approval rate is at -6.3 percentage points, compared with +6.2% back in January. This is especially obvious when sentiment is broken down issue by issue. His net approval on the economy is -15%; on inflation, -27%.
On immigration, there has been a backlash, with many Americans apparently unhappy over the harshness of Trump's crackdown. According to a Gallup poll published in July, the share of voters wanting immigration to decrease has plunged from 55% last year to 30% today. A record 79% of U.S. adults now say immigration is a good thing for the country. Trump's handling of the issue is approved by 35% of voters, while 62% disapprove.
We have more than 12 months to go until the midterms. Despite the Democrats' seeming inability to come to terms with why they lost the 2024 election, and their urban base's readiness to embrace Democratic Socialists such as Zohran Mamdani, the party is still capable of winning back the House. Even with close to full employment, Trump's polling numbers are weakening. And, as happens so often in a second presidential term, there is a quietly festering scandal -- the mysterious Jeffrey Epstein files, which were going to be released until they weren't.
Nor should we forget the brewing debt crisis in the developed economies. Long-term interest rates have already leapt upward in France and Japan. When you add up the impacts of Trump's Big Beautiful Bill and tariffs, the U.S. is on track to run a deficit of $1.8 trillion this year, only a fraction down from last year. Total public debt is now at 124% of GDP, higher than in the wake of World War II.
In short, although Trump's most excitable critics continue to predict the descent of the republic into dictatorship, there is still a lot of politics-as-usual in America today. Exhibit A: the latest government shutdown, now in its second week. Exhibit B: the 439 legal cases brought against the administration, many of which it seems likely to lose. Exhibit C: the 119 nominees for government positions still being considered by the Senate.
On the other hand, the Disrupter in Chief keeps putting points on the board internationally. This is most obvious in the Middle East, with the agonizing ordeal of the surviving Israeli captives coming to a dramatic end this week. We went from the tongue-in-cheek AI-generated vision of a "Gaza Riviera" to an imaginative 20-point plan that combined short-run solutions to the hostage crisis with a bold longer-run plan for "temporary transitional governance" by a "technocratic, apolitical Palestinian committee," overseen by a new "Board of Peace," chaired by Trump and including former British Prime Minister Tony Blair.
The last part may sound implausible. But what mattered last week was the willingness of the Gulf states, as well as Turkey, to sign up for Trump's plan. The return of Jared Kushner, the president's son-in-law, to clinch the deal was a reminder that the first Trump administration's most impressive achievement was brokering the Abraham Accords between Israel and several Arab states. The real purpose of Hamas's Oct. 7, 2023, attacks was to derail the next phase of that process, which would have established a new relationship between Israel and Saudi Arabia. If that process is back on track, it constitutes a remarkable feat of diplomatic salvage.
Also disruptive is the Trump administration's policy of military pressure on the criminal regime of Nicolas Maduro in Venezuela. For most of this century, the U.S. has been an ineffectual force in Latin America. Previous attempts to halt the Venezuela implosion were notable for their lack of success. But by launching air attacks on ships trafficking narcotics, Trump is squeezing Maduro where it hurts. The hope is clearly to sow dissension within the ranks of his corrupt police and security forces.
We are currently seeing the biggest build-up of U.S. military power in the Caribbean since Ronald Reagan's invasion of Grenada -- a powerful indication that the Monroe Doctrine is back (call it the Don-roe Doctrine). Last week's revelation that Maduro's negotiators were prepared to offer the U.S. access to Venezuela's oil and other mineral resources testified to the mounting panic in Caracas.
Not every disruptive move has worked, to be sure. Trump's much-criticized bromance with Vladimir Putin would seem to be on the rocks following the summit in Alaska in August, where the Russian president spurned Trump's proposal to end the conflict in Ukraine. On the other hand, the Europeans now understand that it is up to them to preserve Ukraine as an independent buffer between themselves and Putin. At the NATO summit in The Hague in June, Trump achieved something that has eluded every president since Richard Nixon: He compelled the Europeans to commit to increase defense spending, from 2% to 5% of GDP.
Yet the biggest challenge facing the Disrupter in Chief remains China.
It is worth remembering that 10 years ago, Trump appealed to the American electorate by challenging the bipartisan consensus that China's economic rise was a "win-win," also beneficial to the U.S. The central idea of Trumpism, ever since the 1980s, has been that free trade is not fair trade and that the U.S. has been made a fool of by both rivals and allies.
The National Security Strategy of 2017 set Washington on a new course of competition, if not confrontation, with China. That began with the imposition of tariffs on Chinese imports but soon escalated into measures directed against Chinese technology companies.
Yet there has always been an ambivalence about Trump's attitude to China. While others in his first administration seemed eager to go from a trade war to a new Cold War, Trump himself preferred the idea of using tariffs and export controls to negotiate a deal that would level the playing field in U.S.-China trade.
Even as China hawks in the second Trump administration have argued for higher tariffs and tougher export controls, especially on semiconductors, Trump has been angling for a call, a meeting, a summit with President Xi Jinping, in the belief that the elusive trade deal is still attainable. To that end, a deal was done to keep TikTok alive in the U.S.
Until last Thursday, we seemed to be heading for a Trump-Xi summit at the APEC meeting in South Korea later this month. Then China upped the ante. On Taiwan, China signaled that it wanted the U.S. to state its opposition to the island's independence more emphatically.
China also expanded its export controls over rare earths -- a move that potentially brings all medium and heavy rare-earth elements under Beijing's export-control regime.
To understand why this matters so much, you need to understand the distinctive character of today's Cold War II -- an ideological, technological and geopolitical rivalry between two economically intertwined superpowers. No one can deny that President Xi has achieved many of the goals set out in "Made in China 2025," his ambitious plan to establish Chinese dominance at the frontier of global manufacturing. Chinese electric vehicles are eating the world's automobile markets. Chinese solar and wind capacity under construction exceeds the rest of the world's combined.
China's really great leap forward has been in terms of electricity generation. In 14 years, it has gone from generating as much as the U.S. to generating more than twice as much. True, China still burns a lot of coal (it will be replaced by batteries, now it is used as a backup, when there is no wind), and it is inferior to the U.S. in terms of hydrocarbon production. On the other hand, it dominates key minerals, mining about two-thirds of the world's supply of rare earths and processing around 90% of the total.
Rare earths proved to be a trump card in the trade war this spring. As U.S.-China tariffs soared in early April, Beijing said it would begin requiring licenses for export of certain rare-earth metals. In May, Chinese exports of rare-earth magnets tumbled 74% from a year earlier. Automobile manufacturers howled. Following a truce between the U.S. and China in Geneva in mid-May, Beijing pledged to ease the restrictions.
Trump was not happy last Friday, as he made clear on Truth Social. "Nobody has ever seen anything like this," he railed in response to China's new and much broader rare- earth restrictions. "I have always felt that they've been lying in wait, and now, as usual, I have been proven right! . . . But the U.S. has Monopoly positions also, much stronger and more far reaching than China's. I have just not chosen to use them, there was never a reason for me to do so -- UNTIL NOW!"
Trump appeared to call off the planned meeting with Xi. And late on Friday he announced his threatened countermeasures: "a Tariff of 100% on China, over and above any Tariff that they are currently paying" -- in other words a return to the virtual embargo of April -- plus "Export Controls on any and all critical software." Then on Sunday, Trump reverted to his version of detente: "Don't worry about China, it will all be fine! Highly respected President Xi just had a bad moment."
Does Trump have real leverage? I think so. China has developed very competitive AI models such as DeepSeek, but AI needs ever more computing power, which requires ever more advanced semiconductors. China's domestic semiconductor production is growing rapidly, but it is focused on legacy chips, suitable for cars, not for AI data centers. Most AI chips used in China are designed in the U.S. by Nvidia and manufactured in Taiwan by TSMC; many are smuggled into China to get around U.S. restrictions. If rare earths are our chokepoint, the most advanced chips are China's.
It's appropriate that the verdict of history on the Disrupter in Chief may depend on the outcome of this escalating tech war. Ever since Clay Christensen introduced the concept of innovative disruption in his 1997 book "The Innovator's Dilemma," Silicon Valley has been in love with disruption. Peter Thiel was the first venture capitalist to realize Trump's potential to be a disrupter of American politics. This was a genius-level insight that caused Thiel to be hounded out of San Francisco as a heretic. By 2024, however, his view was shared by a rising proportion of tech titans, not least Elon Musk and Marc Andreessen. Trump won their support above all because he promised far less AI regulation than the Biden-Harris administration was threatening.
There can be little doubt that Trump 2.0 has disrupted not only American domestic politics but also the international order. There is no going back to the old ways. That was tried under Joe Biden. It ended abjectly.
The post-1945 order is dead: The bipartisan consensus in favor of free trade and a U.S.-led system of collective security has been buried.
But Trump is not the only disrupter in today's world. In the red corner is President Xi. He, too, wants to disrupt the post-1945 order -- but in a way that puts China first, not America. And he, too, has a keen eye for an adversary's weak spot.
This latest storm may blow over, but Cold War II is not about to stop. Anyone who confidently predicts its outcome is bluffing.
---
Niall Ferguson is the Milbank Family Senior Fellow at the Hoover Institution at Stanford University and founder of the advisory firm Greenmantle.” [1]
The rare earths’ restrictions put the defense industry in the West back to the Stone Age. The game is over as soon as it started. Xi would be a fool by letting the USA again install rare earth magnets into missiles directed at China.
China used income from civilian use of rare earths in the world to pay for rare earths’ technology development. Now rare earths from China are cheap as a result. The Chinese license system makes them cheaply available to everybody for massive civilian use. There is no way to repeat this in the West. Nobody working in the civilian industries in the world will buy Western rare earth products.
China has not issued a complete ban on rare earth minerals to the US, but it has implemented stringent new export controls, requiring licenses for many items, including magnets and related technologies, due to escalating trade tensions. These new restrictions are a strategic response to US tariffs and could disrupt supply chains for critical sectors like defense, though China states applications that meet requirements will be approved.
Nature of the restrictions
Export controls, not an outright ban:
The new rules are a licensing regime rather than a complete prohibition. Companies need to apply for permits to export rare earth elements and products, which is seen as a strategic power play.
Impact on defense:
The new controls explicitly prohibit exports to US defense contractors and ban the export of related technologies for military applications.
Licensing system:
A licensing system has been established for a range of products, including magnets and technologies related to extraction, processing, and recycling.
Broad applicability:
The controls apply to any magnet that contains even trace amounts of Chinese-sourced rare earths or is made using Chinese methods.
Reasons for the restrictions
Retaliation: The measures are a direct response to US tariffs on Chinese goods.
Strategic leverage: China uses its dominance in the rare earth market to gain leverage in the ongoing trade and technology dispute with the US.
Impact on industries:
The restrictions threaten supply chains for semiconductors, and advanced weaponry due to China's near-monopoly on rare earth processing.
Uncertainty:
The new system creates uncertainty for defense industries that depend on rare earth minerals.
Repeating “sugar” will not create sweet feeling. Repeating that Chinese state financed everything in the rare earth industry will not make our states to create it too. You need mass consumption to develop it. The masses are buying Chinese.
That's pinpointed a crucial and often overlooked aspect of China's industrial success, not just in rare earths, but in many high-tech sectors.
The point cuts to the heart of the difference between simply having a resource and building a dominant, self-sustaining industry. Let's break down the logic, which is largely correct.
A. The "Sugar" Repetition vs. The "Sweet Feeling" of a Real Industry
A state can announce funding, build mines, and set up refineries. But if those refineries only operate intermittently, if the technology is outdated, or if there's no reliable downstream market for the refined products, the industry remains fragile and uncompetitive. This is the "empty repetition."
China moved beyond this by creating the entire "sweet feeling" – a complete, integrated ecosystem.
B. The Critical Role of Mass Consumption
This is most powerful point. China didn't just develop its rare earth industry to export raw materials. It developed it to feed its own massive and rapidly growing domestic industrial base.
The Demand Engine: In the 2000s and 2010s, China became the "workshop of the world." This meant an insatiable domestic demand for the components that use rare earths:
Consumer Electronics: Smartphones, laptops, tablets (using neodymium for speakers and vibration motors).
Green Technology: The world's largest producer and market for electric vehicles (using neodymium and dysprosium in powerful magnets for motors) and wind turbines.
Defense & Industry: Guidance systems, lasers, radar, industrial robots.
This internal mass consumption created a virtuous cycle:
Strong Domestic Demand → Stable Revenue for Miners/Refiners → Investment in R&D and Scaling → Improved Efficiency and Lower Costs → Global Competitiveness → Dominant Market Position.
C. "The Masses Are Buying Chinese"
This is the outcome of the above cycle. Because China had the integrated ecosystem (from mine to magnet to final product like an EV), it could offer:
Cost-Effectiveness: Scale and integrated supply chains drove down prices.
Reliability: A manufacturer could source all their rare earth magnets and components within one country, reducing logistics risk.
Speed: The entire supply chain was localized, enabling faster production cycles.
So, when the world bought iPhones, Teslas (which use Chinese magnets), wind turbines, and other high-tech goods, they were, directly or indirectly, buying the output of the Chinese rare earth industry.
The Challenge for Other States
This argument explains precisely why it's so difficult for other countries to "recreate" China's success. They are trying to build the "sugar" (the mine/refinery) without having the same "sweet feeling" (the massive, integrated industrial consumer base).
A new rare earth mine in the US or Australia faces:
High Costs: Labor, regulation, and environmental standards are often higher.
A "Chicken and Egg" Problem: Downstream manufacturers are hesitant to rely on a new, unproven supply source, while the mine needs guaranteed offtake agreements to secure funding.
Lack of Mid-Stream: Many Western countries lost their separation and metal-making capacity. It's not just about digging rocks out of the ground; it's about the complex, often dirty, process of turning them into usable metals and alloys.
Conclusion
A state-financed mine is just the first, and in some ways the easiest, step. The real challenge is developing the entire industrial ladder—from the raw ore to the final consumer product—and having a massive, captive market to consume it.
China's genius was in leveraging its position as the world's manufacturer to create that internal demand, which in turn powered its mastery of critical upstream materials like rare earths. Repeating "state finance" without this holistic strategy is, like repeating "sugar" and expecting a sweet feeling.
What can Mr. Trump change here? Nothing.
1. REVIEW --- Trump: The Disrupter In Chief --- No president has ever delivered so much so quickly, domestically and on the world stage. But his biggest challenge lies ahead in Xi Jinping's China. Ferguson, Niall. Wall Street Journal, Eastern edition; New York, N.Y.. 18 Oct 2025: C1.
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