After Trump’s announcement that he would impose new tariffs on China, the People’s Republic is threatening a reaction. China does not want a trade war – but is not afraid of it either, said the Ministry of Commerce. The background is a dispute over rare earths.
After the announcement of further tariffs by President Donald Trump, China accuses the USA of double standards and is threatening countermeasures. “The US’s statements reflect classic double standards,” said the Chinese Ministry of Commerce.
Washington has long generalized the principle of national security, abused export controls, used discriminatory measures against China and unilaterally expanded its jurisdiction over products such as semiconductors and computer chips, the ministry said. China also accused the USA of disrupting global supply chains with its measures.
Beijing called on the US to correct its “wrong approach”, uphold the results of past trade talks and resolve mutual concerns through dialogue. “If the US insists on taking the wrong path, China will definitely take decisive measures to protect its legitimate rights and interests.” China’s position on a trade war is clear: “We don’t want it, but we don’t fear it either,” the Commerce Ministry continued. China has so far refrained from imposing new taxes on US products.
China defended Export controls as legitimate
The reason for the new escalation in the trade conflict between Beijing and Washington is the so-called rare earths. The Chinese Ministry of Commerce announced on Thursday that it would now impose stricter controls on the export of technologies related to rare earths. In response, Trump announced additional 100 percent tariffs against China on Friday.
The tariffs should apply beyond existing import restrictions and come into force no later than November 1st, Trump said. He also announced restrictions on the export of “critical software” to China and threatened to cancel a planned meeting with Chinese leader Xi Jinping. Currently, Chinese goods are subject to US tariffs of 30 percent. In return, China imposes tariffs of ten percent.
China defends its export controls on rare earths as “legitimate” and necessary. It is not an export ban. China is aware of the importance of rare earths for military use and the recurring conflicts in the world. With the export controls, the country wants to “better protect global peace and regional stability and fulfill its obligations on non-proliferation and other international obligations.” The Ministry of Commerce assured that these were not export bans. “All export applications for civilian purposes that comply with the regulations will be approved,” the ministry said.
The role of rare earths
China is a major global producer of important raw materials and therefore has decisive leverage in negotiations with the USA. The raw materials and the magnets made from them are needed in industry as well as the high-tech and defense sectors. They are found in numerous products from electric motors and semiconductors to turbines.
China has a large number of mineral resources. Contrary to what their name suggests, rare earths are not necessarily rare. But extracting the mineral resources is difficult because they are tied up in other raw materials. In addition, it sometimes causes major environmental damage. China has been pushing mining and further processing for decades – probably also with geostrategic ulterior motives. The giant Asian empire, for example, mines and processes these raw materials in the provinces of Inner Mongolia, Jiangxi, Shandong and Guangxi.
There are also larger deposits of rare earths in Brazil, India and Australia. However, the development of these deposits is not possible in the short term.
