U.S. Trade Representative Jamieson Greer told CNBC on Tuesday that President Donald Trump could impose 100% tariffs on China on Nov. 1 or sooner, depending on Beijing’s next move in the rare earth dispute.
“A lot depends on what the Chinese do,” Greer said in an interview with CNBC. “They are the ones who chose to do this massive escalation.”
Last week, China announced sweeping restrictions on rare earth exports that, if implemented, could disrupt the U.S. defense, technology, semiconductor and auto industries.
President Trump retaliated by threatening massive tariffs that would effectively halt trade between the world’s two largest economies. However, the president appears to have refrained from commenting earlier this week, saying that “everything will be fine” with China.
“We cannot have a situation where China wants to maintain a veto over global high-tech supply chains,” the U.S. Trade Representative said.
President Trump and President Xi scheduled to meet
The restrictions caught the White House by surprise ahead of a meeting between President Trump and President Xi Jinping scheduled for the Asia-Pacific Economic Cooperation meeting in Seoul, South Korea, later this month.
Greer said a meeting between President Trump and President Xi remains scheduled, but suggested those plans could change depending on how the situation develops.
“Whether it happens or not, neither we nor the Chinese side want to make any pre-commitments,” Guria said of the talks. “But I think it makes sense for people to talk when they can.”
Greer said senior staff-level officials from the United States and China discussed the rare earths dispute in Washington through Monday.
“We think we can resolve this issue,” Greer said of the trade dispute.
“I want to cooperate with Chinese people.”
About $2 trillion worth of value was wiped from the U.S. stock market on Friday following President Trump’s threat to impose tariffs on China. Greer said the White House is watching the market closely, but the administration is focused on building long-term economic success by moving supply chains back to the United States and reducing dependence on China.
“We want to make sure that the market is also reacting to the right information,” Greer said. “You’ve seen the market calm down this week as it recognizes that the president and his team want to work with the Chinese.”
Rare earths are important minerals used in the manufacture of magnets, which are important inputs in U.S. weapons platforms, electric vehicles, the semiconductor industry, and other applications.
According to the International Energy Agency, China controls about 60% of the world’s rare earth mining and more than 90% of the refining. According to the U.S. Geological Survey, the United States relies on China for about 70% of its rare earth imports.
