The U.S.-China trade war is on the verge of a significant escalation, with the Trump administration signaling a potential new wave of high tariffs after U.S. Trade Representative Jamieson Greer accused China of risking a violation of a previous trade pact. The core of the dispute is China’s new, harsh export controls on rare earth minerals, which are critical to American high-tech and defense industries.
Appearing at a press conference at the Treasury Department, USTR Jamieson Greer held up a copy of the “Geneva agreement”—a trade pact struck earlier this year—and stated that China’s action could violate its terms.
“This rule gives China control over the entire global supply chain,” Greer warned, referring to China’s newly announced export controls on minerals vital for key sectors like AI, defense, and auto manufacturing. The curbs are set to begin taking effect on November 1st.
Greer explained that the earlier agreement, made in Switzerland, committed the U.S. to lower tariffs in exchange for reliable access to China’s rare earth minerals. “We have lowered tariffs since that time but now the Chinese have expanded their export controls,” he said.
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“They Can’t Be Trusted”
The USTR suggested the controls were part of a broader, strategic move. “Many are suggesting that China’s action is simply posturing to leverage the negotiations with the United States,” Greer noted. “While that may be one element of China’s approach, it’s obvious this is part of a broader play by China to control the world’s supply chains.”
Treasury Secretary Scott Bessent, who joined Greer, offered a more pointed warning, relaying that U.S. firms are already reporting supply disruptions.
“Some U.S. auto companies have called us in the past week and said that there has been a clear slowdown in magnets,” Bessent stated. He recounted the administration’s attempt to seek clarification from Beijing: “We asked the Chinese about this and they said, ‘Oh, it probably had something to do with the holiday.’ They can’t be trusted.”
High Tariffs on the Horizon
The new restrictions have prompted an immediate and harsh response from the White House. President Trump has already threatened to impose a 100% tariff on Chinese goods if Beijing proceeds with the tightened controls on the minerals, for which China is the world’s dominant producer and processor.
The looming trade escalation puts further pressure on global markets that rely heavily on China’s supply of rare earths.
Despite the heightened rhetoric, Bessent offered a glimmer of hope for a diplomatic solution. He confirmed that a planned meeting between President Trump and Chinese President Xi Jinping later this month at a summit in South Korea is still scheduled.
“I am optimistic this can be de-escalated,” Bessent told reporters. The coming weeks will determine if the leaders can forge a new truce or if the trade war will spiral into a new, costly phase of 100% import taxes.
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