China on Thursday accused the United States of causing “panic” over its restrictions on rare earth minerals, but signaled it was open to trade talks to resolve a dispute that threatens to reignite a trade war between the world’s two largest economies.
“The US interpretation significantly distorts and exaggerates China’s measures, and intentionally causes unnecessary misunderstanding and panic,” Ministry of Commerce spokesperson He Yongqian said at a press conference, according to the state-run Global Times newspaper.
Last week, the Chinese government announced sweeping restrictions on rare earth exports ahead of a meeting between President Donald Trump and President Xi Jinping in South Korea. President Trump has threatened to impose 100% tariffs on China starting November 1st or sooner in retaliation.
U.S. Trade Representative Jamison Greer accused China of trying to dominate global technology supply chains in an interview with CNBC on Tuesday. Greer said the Chinese government’s actions will determine whether the tariffs go into effect.
Greer told CNBC that President Trump wants to work with China and plans to meet with President Xi in South Korea later this month. China’s Mr. He said Thursday that the Chinese government is open to talks with the United States.
China criticizes the US
China’s Ministry of Commerce said the export restrictions are aimed at protecting national security by preventing the misuse of rare earths for military applications such as weapons of mass destruction.
The spokesperson pointed to restrictions the United States has placed on China regarding semiconductors and foreign content regulations, aimed at excluding China from North American supply chains.
“The condemnation from the United States makes it clear that the United States is projecting its own actions onto other countries,” he said.
Rare earths are used to make magnets, which are critical inputs for U.S. weapons platforms such as the F-35 fighter jet, Tomahawk cruise missile, and Predator drone. Rare earth magnets are also used in civilian applications such as robotics, electric vehicles, and the semiconductor industry.
White House leans towards industrial policy
China dominates the global rare earth supply chain, and the United States relies on China for imports. The Trump administration is working to build a domestic supply chain independent of the Chinese government. The Department of Defense signed the agreement in July. MP materialthe largest rare earth mining company in the United States, including equity interests, price floors, and off-take agreements.
Treasury Secretary Scott Bessent told CNBC on Wednesday that the Trump administration could take stakes in other companies in response to China’s rare earth regulations.
Asked about the acquisition of additional shares, Bessent said: “I’m not surprised.” “When you hear announcements like this week’s with China on rare earths, you know we have to be self-sufficient or make do with cooperation with our allies.”
The Treasury secretary accused China of using its advantages in rare earth refining and processing to drive down prices and drive foreign competitors out of the market. Bessent said the Trump administration plans to impose price floors on a wide range of industries to counter market manipulation by China.
“When you’re facing a non-market economy like China, you have to implement industrial policy,” Bessent told Sarah Eisen at CNBC’s America Investment Forum in Washington, D.C.
