President Donald Trump threatened Friday to impose a “massive tariff increase” on Chinese goods imported into the United States to “financially thwart” new export controls China has imposed on rare earths from that country.
Trump also threatened in a social media post to cancel his upcoming meeting with Chinese President Xi Jinping over the dispute.
Stock markets fell after Trump’s belligerent Truth Social post about China, in which he said “there is no way this country will be allowed to keep the world ‘captive'” with its rare earths policy.
China controls about 70% of the world’s supply of rare earth minerals, essential to high-tech industries including automobiles, defense and semiconductors.
“One of the policies we are considering right now is a massive increase in tariffs on Chinese products entering the United States of America,” Trump wrote. “Many other countermeasures are also being seriously considered. Thank you for your attention to this matter!”
China’s Commerce Ministry said Thursday that foreign entities must now obtain a license to export products that contain more than 0.1 percent rare earths from that country, or that are made using Chinese mining, refining, magnet-making or recycling technologies.
The new rules regarding rare earth exports are expected to come into force on December 1.
U.S. and Chinese officials are working to arrange a summit between U.S. President Donald Trump and Chinese President Xi Jinping in the coming months, which will likely take place in Beijing, experts said.
Dilara Irem Sancar | Anadolu | Getty Images
“Very strange things are happening in China!” Trump wrote in his article Truth Social.
“They are becoming very hostile and sending letters to countries around the world telling them that they want to impose export controls on every item of production related to rare earths, and virtually everything they can think of, even if it is not made in China,” Trump wrote.
The president said he had not spoken to Xi about the issue “because there was no reason to do so.”
“This came as a real surprise, not only to me, but to all the leaders of the free world. I was scheduled to meet with President Xi in two weeks, at APEC, in South Korea, but now there seems to be no reason to do so,” Trump wrote, referring to the Asia-Pacific Economic Cooperation summit.
Trump claimed the United States had been contacted by other countries “extremely angry about this great trade hostility coming out of nowhere.”
“Our relationship with China over the past six months has been very good, which makes this trade decision even more surprising,” he wrote.
The Chinese Embassy in Washington, D.C., did not immediately respond to a request for comment.
—CNBC Anniek Bao contributed to this story.
