China has made it clear that it will not yield to the recent 100% tariff threat from U.S. President Donald Trump, advocating for dialogue instead of confrontation. In a statement released by the Commerce Ministry, the country reiterated its position, asserting,
“China’s stance is consistent. We do not want a tariff war but we are not afraid of one.”
This declaration follows Trump’s announcement to potentially impose a steep tax on Chinese imports by November 1, a move prompted by new restrictions China has placed on the export of rare earth elements, crucial for various consumer and military applications.
China’s commitment to its trade stance
The Chinese Commerce Ministry criticized the U.S. approach, stating that
“Frequently resorting to the threat of high tariffs is not the correct way to get along with China.”
The ministry’s online post, attributed to an unnamed spokesperson, emphasized that if the United States continues its aggressive tactics, China will take necessary actions to protect its legitimate rights and interests.
This escalating exchange raises concerns about the potential derailment of a planned meeting between President Trump and Chinese President Xi Jinping, jeopardizing a temporary truce in the ongoing trade conflict, which saw tariffs from both nations exceed 100% earlier this year.
Implications of rare earth restrictions
As part of its trade strategy, Trump has implemented tariffs on imports from numerous trading partners, with the intention of negotiating concessions in return for reduced tariffs. However, China has remained steadfast and leveraged its significant economic influence.
Accusations of violating the spirit of the trade truce have surfaced from both sides, with Trump labeling China as “very hostile” and claiming it is holding global markets captive through strict regulations on rare earth metals and magnets. China’s latest regulations require foreign companies to secure special approval for exporting products that contain even minute amounts of rare earth elements sourced from its territory, essential for a wide array of technologies, from military-grade materials to everyday electronics.
Currently, China dominates the rare earths market, accounting for nearly 70% of global mining and controlling about 90% of processing capabilities. Access to these critical materials remains a pivotal issue in the ongoing trade discussions between Washington and Beijing.
The Chinese Ministry noted that export licenses would still be available for legitimate civilian applications, despite acknowledging the military relevance of these minerals. Additionally, the ministry stated that the U.S. has imposed several new trade restrictions recently, including extending export controls to more Chinese companies. Furthermore, it criticized the U.S. for disregarding Chinese concerns by advancing new port fees for Chinese vessels, which are set to be implemented shortly. In retaliation, China announced plans to introduce port fees on American ships.