China's tightening restrictions on rare earth exports—critical for technology and defense—are escalating tensions with the U.S., exposing vulnerabilities in Western supply chains. While the U.S. seeks to revive soybean imports and negotiate a broader trade framework, China's strategic control over processing gives it leverage. These export curbs mirror past U.S. tech sanctions and evoke historical trade shocks, prompting fears of disrupted military capabilities and support for Ukraine. Yet, Beijing risks long-term reputational damage by weaponizing its dominance. Meanwhile, the Trump administration faces a strategic crossroads: pursue a short-term deal or brace for prolonged economic decoupling. Efforts to reroute Chinese exports through third countries reveal the limits of tariff-based policies and the complexity of disentangling deeply interwoven economies.