As the Trump Trade War lurches onward, with another heaping amount of uncertainty added over the weekend, China just made a move that could have drastic worldwide consequences. They haven't fully committed to playing hardball, but they are certainly signalling that it might be their next step. And (to mix game-playing metaphors), in this particular game, China holds all the cards. They've got a royal flush, and we don't even have a pair of twos to work with.

First, the weekend follies. A welcome announcement was made by the White House that smart phones and other electronics would be "exempted" from the tariffs (currently at 145 percent) on China. This was cause for much rejoicing in Silicon Valley, as companies like Apple breathed an enormous sigh of relief.

Then, continuing their parade of incompetence, the White House announced that there was no exemption, really, that tariffs would be levied on computers and electronics and even computer chips -- just using a different classification of tariffs (or, as they put it, they would be in a different "bucket" of tariffs). They would study the issue and would later announce what the new tariffs would be.

Predictably, this led to more confusion in the industry. Business leaders have to make plans that stretch out years into the future (like the decision to build a new factory, for instance), and yet they have no clue what's going to happen to their industry next week -- which makes planning nigh on impossible. Chaos continues to reign.

The basic problem is that Trump can't have it both ways. Putting heavy tariffs on computer chips would have a profound influence on the American economy (since there are computer chips in just about everything these days), but if there are no tariffs then there is no new motivation for companies to build chip factories here.

All of this confusion is even hitting American companies that build stuff here at home:

President Donald Trump's sweeping tariff-driven reversal of decades of free trade is creating financial chaos for the very sector it's meant to rebuild: American manufacturing.

Although the full extent of economic damage is still unclear, volatile tariff policies are making it tougher for American companies to make and sell goods, whether they're producing medical devices in Florida, toys in Ohio or bicycles in California.

Even though the Trump administration put many of its sharpest levies on hold last week while boosting tariffs on China, companies around the country say the recent messiness of announcements and uncertainty is hurting business: Their costs are rising, and demand is slowing as spooked customers in the United States and abroad slam the brakes on spending.

. . .

"It's become extremely difficult for U.S. manufacturers to keep doing business, which is ironic because that's the very group these tariffs are supposed to protect," said Lizbeth Levinson, an international trade attorney at Fox Rothschild. "Businesses are putting everything on hold. They literally can't plan from one day to the next."

Donald Trump has always been a guy very much into his own brand, but what he has done with all this chaos is to make the "Made in America" brand become a negative thing, all around the world. Why would any foreign company or consumer buy American products when Trump is treating even our allies harshly in his trade war? Already in some places, it has become a matter of national pride not to buy any American products, and this trend is only getting started. American companies who ship products overseas -- the very products the world would need to buy more of to fix Trump's bugaboo trade deficit problem -- are seeing their overseas markets dry up and disappear.

China, meanwhile, has become the biggest target in the Trump Trade War. With sky-high tariffs now applied in both directions, trade between the two countries will also dry up. What American company or consumer can afford a 145 percent tax on Chinese products?

But China doesn't just have tariffs to work with, in terms of retaliation against America. Which is why they just made a move that few have even noticed yet. The New York Times reported the story over the weekend:

China has suspended exports of a wide range of critical minerals and magnets, threatening to choke off supplies of components central to automakers, aerospace manufacturers, semiconductor companies and military contractors around the world.

Shipments of the magnets, essential for assembling everything from cars and drones to robots and missiles, have been halted at many Chinese ports while the Chinese government drafts a new regulatory system. Once in place, the new system could permanently prevent supplies from reaching certain companies, including American military contractors.

. . .

On April 4, the Chinese government ordered restrictions on the export of six heavy rare earth metals, which are refined entirely in China, as well as rare earth magnets, 90 percent of which are produced in China. The metals, and special magnets made with them, can now be shipped out of China only with special export licenses.

Note that: "which are refined entirely in China." They have a complete worldwide monopoly. America has only one rare earth mine (which has struggled to stay in business for a while now), but even it sends the ore to China for refining.

If China wanted to, it could decide that it wasn't going to send any rare earth magnets anywhere. Which would have enormous ripple effects, as the article points out:

The so-called heavy rare earth metals covered by the export suspension are used in magnets essential for many kinds of electric motors. These motors are crucial components of electric cars, drones, robots, missiles and spacecraft. Gasoline-powered cars also use electric motors with rare earth magnets for critical tasks like steering.

The metals also go into the chemicals for manufacturing jet engines, lasers, car headlights and certain spark plugs. And these rare metals are vital ingredients in capacitors, which are electrical components of the computer chips that power artificial intelligence servers and smartphones.

You'll note that those categories cover a whole lot of military hardware. None of which could be built with the current designs if the rare earth magnets suddenly become unavailable. Which seems to be the point China is making:

In a potential complication, China's Ministry of Commerce, which issued the new export restrictions jointly with the General Administration of Customs, has barred Chinese companies from having any dealings with an ever-lengthening list of American companies, particularly military contractors.

So far, China is merely threatening to choke off rare earth supplies. There will be a pause of at least 45 days before any export licenses are granted under the new Chinese rules, but nobody really knows what will happen at that point. China could issue licenses to export to other countries in the world, but not America. And we would be out in the cold, because China has a complete worldwide monopoly on the products.

Again, we haven't come to this point yet. China could decide to issue export licenses to American companies, but limit the amount they could buy. This would not be a complete stranglehold on American industries, but it would slow production enormously. Since China has all the cards in this particular game, they can pretty much do anything they want, and we will just have to deal with the outcome.

The current 45-day pause seems like a warning shot across America's bow. China is quite obviously letting us know that they could cut off all supplies, and that would be an enormous bargaining chip in the Trump Trade War negotiations. Sooner or later the White House and the national media will realize the game of hardball China is threatening, but so far this is flying under most people's radar.

And nobody knows how any of this is going to end, of course.

Chaos reigns.

-- Chris Weigant

Follow Chris on Twitter: @ChrisWeigant