Trump to China: Give magnets or face 200% tariffs

WASHINGTON: President Donald Trump told reporters on Monday that China has to give the United States [rare earth] magnets or “we have to charge them 200% [US] tariff or something” amid the ongoing trade war between the two nations.

“But we’re not going to have a problem, I don’t think, with that,” he added.

The remarks came China is increasingly sensitive about rare earths and its control over supply, adding several rare earth items and magnets to its export restriction list in April in retaliation to US tariff hikes by the United States.

Rare earths are a key component to make powerful magnetic alloys known as rare earth magnets. China is the world’s leading producer of rare earths, used to make magnets essential to the automotive, electronics and defense industries.

This month, the US and China delayed the threatened reimposition of higher tariffs on each other’s exports for another 90 days — meaning the pause on steeper duties will be in place until November 10.

Meanwhile, China is counting on one crucial advantage as it seeks to grind out a deal to ease its high-stakes trade war with the United States – dominance in rare earths.

Read more: Rare earths: China’s trump card in trade war with US

It is not clear whether Trump on Monday was referring to the rare earth imports from China or the rare earth magnets as a finished product.

At the same time, Trump said he expects to visit China this year or shortly afterwards, noting that economic ties between the two countries have improved.

CARDS vs CARDS

Speaking to reporters as he met South Korean President Lee Jae Myung in Washington, Trump pointed to recent talks with Chinese counterpart Xi Jinping: “At some point, probably during this year or shortly thereafter, we’ll go to China.”

“We’re going to have a great relationship with China,” Trump vowed.

The US leader added: “They have some cards. We have incredible cards, but I don’t want to play those cards. If I played those cards, that would destroy China.”

Previously, Trump on June 11 touted ties with China as “excellent”, saying the superpowers reached a deal, including on rare earths, after two days of talks aimed at preserving a truce in their damaging trade war.

Read more: Trump touts ‘done’ US-China deal on rare earths, Chinese students

He said on his Truth Social platform that China would supply rare earth minerals and magnets – vital elements for US industries – while Washington would allow Chinese students to remain in American universities.

With no sign of an end to the US-China trade war, Beijing’s ambassador to Washington said on Saturday said that US protectionism is undermining agricultural cooperation with China, , warning that farmers should not bear the price of the trade war between the world’s two largest economies.

ECONOMY AND NATIONAL SECURITY

One of the main reasons, if not the sole, behind introducing unprecedented US tariffs is that Trump views economy from the prism of national security while “Making America Great Again” by bringing manufacturing back to the United States.

Rare earths and rare earth magnets are an essential part of it. That’s why he had floated the idea of taking over Greenland, which is no more in news now.

Read more: Vance says Greenland will be more secure under US than Denmark

On Friday, he said computing giant Intel had “agreed” to give the US government a 10 per cent equity stake in the company, the latest extraordinary intervention by the White House in corporate America.

And on Monday, Trump doubled down on the idea of similar deals in other sectors on Monday, telling reporters at the White House, “I hope I’m going to have many more cases like it.”

Trump said in a social media post that he would help companies that make similar “lucrative” deals with U.S. states, but did not provide details. 

He has said the US needs more production capacity in critical industries rather than outsourcing manufacturing to other countries.