China is not backing down on new rare earth export controls despite President Trump's threat of retaliatory tariffs.
For context: Beijing's new restrictions, announced last week, tighten control over rare earth minerals, and any product containing more than 0.1% of them, including electric motors, semiconductor chips, and components essential to modern vehicles.
President Trump responded Friday by announcing 100% tariffs on Chinese goods starting November 1.
But China's Ministry of Commerce called the tariff threat an example of "double standards," reports CNBC.
And Beijing accused Washington of overstretching the concept of national security, abusing export control powers, and taking discriminatory actions against China.
What they’re saying: “Willful threats of high tariffs are not the right way to get along with China,” the ministry spokesperson said. “China’s position on the trade war is consistent: we do not want it, but we are not afraid of it.”
Why it matters: China controls 70% of the global rare earth supply and has repeatedly used the critically needed minerals as leverage in trade negotiations. With the new controls extending to any product containing just 0.1% rare earths, Beijing has tremendous power over global auto production.
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Digging deeper: China maintains that its export controls on rare minerals are “legitimate” under international law and intended to strengthen its own export management system.
In addition to rare earth minerals, the measures also touch on intellectual property and technology exports.
The restrictions are not blanket bans, the Commerce Ministry clarified, noting that export applications meeting established requirements “will be approved.”
“China has fully assessed the potential impact of these measures on the supply chain and is confident that the impact will be very limited,” said the government spokesperson.
Bottom line: American and European parts suppliers have already faced months of delays getting export licenses, and China's new rules close the workaround many were using.
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