BEIJING/HONG KONG: China called US President Donald Trump’s latest tariffs on Chinese goods hypocritical on Sunday and defended its curbs on exports of rare earth elements and equipment, but stopped short of imposing new levies on US products.
Trump on Friday responded to Beijing’s most recent export controls by imposing additional tariffs of 100 percent on China’s US-bound exports, along with new export controls on critical software by November 1.
The revived trade tensions have rattled Wall Street, sending Big Tech shares tumbling, worried foreign companies dependent on China’s production of processed rare earths and rare earth magnets, and could derail a summit between Trump and Chinese President Xi Jinping tentatively scheduled for later this month.
RESPONDING TO TRUMP
The Chinese commerce ministry’s statement on Sunday was Beijing’s first direct response to Trump’s lengthy Truth Social post on Friday, where he accused Beijing of suddenly raising trade tensions after an uneasy truce was reached six months ago between the world’s two largest economies, allowing them to trade goods without sky-high tariff rates.
“Our relationship with China over the past six months has been a very good one, thereby making this move on trade an even more surprising one,” Trump said. The commerce ministry said in an equally lengthy statement that its export controls on rare-earth elements followed a series of US measures since bilateral trade talks in Madrid last month. Beijing cited the addition of Chinese companies to a US trade blacklist and Washington’s imposition of port fees on China-linked ships as examples.
“The US actions have severely harmed China’s interests and undermined the atmosphere of bilateral economic and trade talks, and China is resolutely opposed to them,” the ministry said. Beijing stopped short of explicitly connecting these US actions to its export curbs on rare-earth elements, saying they were motivated by concern about these materials’ military applications at a time of “frequent military conflicts”.
It also held off on announcing a corresponding levy on China-bound US imports, unlike earlier in the year, when both superpowers progressively ratcheted up tariffs on each other until the US rate was 145 percent while China’s was 125 percent.
‘PATH FOR NEGOTIATIONS’
China’s decision not to immediately respond in kind to Trump’s opening salvo in this latest round of trade tensions could leave the door open for both countries to negotiate a de-escalation, analysts said.
“By clarifying the rationale behind its retaliatory measures, Beijing is also outlining a potential path forward for negotiations. The ball is now in the US court,” said Alfredo Montufar-Helu, managing director at strategic advisory firm GreenPoint.
But Hutong Research said in a note on Saturday that if Beijing chooses not to respond to Trump’s 100% tariff hike, it may signal that it no longer prioritises a long-term deal with him, reflecting diminished confidence in his ability to restrain hawks or stick to commitments. “Key watchpoints now: Whether Beijing moves to freeze or complicate the TikTok sale, given its political symbolism. Proceeding with the sale under current conditions would be seen as a major concession (from Beijing),” the research firm said.
Other tools in Beijing’s arsenal include regulatory action targeting US companies. China’s State Administration for Market Regulation (SAMR) said last month leading US AI chip manufacturer Nvidia violated the country’s anti-monopoly law, during US-China trade talks in Madrid.
The market regulator on Friday announced an antitrust investigation into US chip manufacturer Qualcomm over its June 2025 acquisition of Israeli chip designer Autotalks. A few hours after the commerce ministry’s response to Trump’s post and tariff hike, SAMR said Qualcomm had completed the acquisition without informing the regulator, adding that the US firm had acknowledged this.
“Based on clear facts and conclusive evidence, our bureau lawfully initiated an investigation into Qualcomm’s unlawful…acquisition of Autotalks,” SAMR said.
CHINA SAYS EXPORT CONTROLS ARE NOT EXPORT BANS
The commerce ministry also countered Trump’s narrative that China was using its dominance in processed rare earths and rare earth magnets to attack all countries, not just the US
“We have been contacted by other countries who are extremely angry at this great trade hostility, which came out of nowhere,” Trump said on Friday on Truth Social.
China produces over 90 percent of the world’s processed rare earths and rare earth magnets. The 17 rare earths are vital materials in products ranging from electric vehicles to aircraft engines and military radars.
Exports of 12 of them are restricted after China’s commerce ministry on Thursday added five – holmium, erbium, thulium, europium and ytterbium – along with related materials. The commerce ministry statement on Sunday sought to reassure foreign companies spooked by the latest export curbs, promising to promote compliant trade by granting general-purpose licenses and license exemptions.
“China’s export controls are not export bans,” it said. “Any export applications for civilian use that comply with regulations will be approved, and relevant enterprises need not worry.”
Reuters adds: Trade Representative Jamison Greer said that the US reached out to China for a phone call following an announcement that it was expanding its rare earths export controls but Beijing deferred, while China accused the US of what it called “double standards.”
“I can tell you that we were not notified, and quickly, as soon as we found out from public sources, we reached out to the Chinese to have a phone call, and they deferred,” Greer told Fox News’ “Sunday Briefing,” while calling China’s move “a power grab.”
US President Donald Trump responded on Friday to China’s expansion by imposing 100 percent tariffs on China’s US-bound exports, along with new export controls on “any and all critical software” by November 1.
“Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The USA. wants to help China, not hurt it,” Trump wrote on Truth Social on Sunday.
The Chinese embassy in Washington, D.C., did not immediately return a request for comment.
China hit out at Trump’s latest tariffs on Chinese goods, accusing the US on Sunday of what it called “double standards.”
In a report by state broadcaster CCTV, the Chinese commerce ministry defended its curbs on exports of rare earth elements and equipment, but stopped short of imposing new levies on US products. It said the restrictions are driven by concern over the military applications of these elements at a time of “frequent military conflicts.”
Beijing also pointed out the US added Chinese companies to a trade blacklist and levied port fees on China-linked ships as examples.
China and the US have been embroiled in a trade war since Trump returned to the White House earlier this year. Global financial markets tumbled as Trump floated the possibility of cancelling an upcoming meeting with Chinese President Xi Jinping.
Greer said he believes that markets will calm in the coming week as things settle. He said a Trump-Xi meeting on the sidelines of the Asia-Pacific Economic Cooperation forum in South Korea could still happen later this month.
