China on Thursday accused the U.S. of creating “panic” over Beijing’s controls on rare earth minerals, but indicated it is open to trade talks to resolve a dispute that has threatened to reignite a trade war between the world’s two largest economies.
“The US interpretation seriously distorts and exaggerates China’s measures, deliberately creating unnecessary misunderstanding and panic,” Ministry of Commerce spokesperson He Yongqian told a news conference, according to the state newspaper Global Times.
Beijing last week announced sweeping controls on rare earth exports ahead of an expected meeting between President Donald Trump and President Xi Jinping in South Korea. Trump has threatened to impose 100% tariffs on China starting Nov. 1 or sooner in retaliation.
U.S. Trade Representative Jamieson Greer accused China of trying to control the world’s technology supply chains in an interview with CNBC on Tuesday. Beijing’s actions will determine whether the tariffs take effect, Greer said.
Trump wants to work with Beijing and is still scheduled to meet with Xi in South Korea later this month, Greer told CNBC. Beijing is open to talks with the U.S., China’s He said Thursday.
China points finger at U.S.
China’s Ministry of Commerce said its export restrictions aim to protect its national security by preventing the misuse of rare earths in military applications like weapons of mass destruction.
The spokesperson He pointed to restrictions the U.S. has imposed against China on semiconductors and foreign content rules that aim to push Beijing out of North American supply chains.
“The accusations from the US reveal that the US is projecting its own behavior onto others,” He said.
Rare earths are used to make magnets that are crucial inputs in U.S. weapons platforms like the F-35 warplane, Tomahawk cruise missiles and Predator drones. Rare earth magnets are also used in commercial civilian applications such as robotics, electric vehicles and the semiconductor industry.
White House leans into industrial policy
Beijing dominates the global rare earth supply chain and the U.S. is dependent on China for imports. The Trump administration is working to set up a domestic supply chain that is independent of Beijing. The Department of Defense struck a deal in July with MP Materials, the largest U.S. rare earth miner, that includes an equity stake, a price floor and an offtake agreement.
Treasury Secretary Scott Bessent told CNBC on Wednesday that the Trump administration could take equity stakes in other companies in the wake of China’s rare earth restrictions.
“I wouldn’t be surprised,” Bessent said when asked about additional equity stakes. “When we get an announcement like this week with China on the rare earths, you realize we have to be self-sufficient, or we have to be sufficient with our allies.”
The Treasury secretary accused China of using its dominance in rare earth refining and processing to slash prices and push foreign competitors out of the market. Bessent said the Trump administration will impose price floors across a range of industries to combat market manipulation by China.
“When you are facing a nonmarket economy like China, then you have to exercise industrial policy,” Bessent told Sara Eisen at CNBC’s Invest in America Forum in Washington, D.C.
