U.S. President Trump Recently Made Tough Remarks at the White House, Stating That “If China Continues to Maintain Restrictions on Rare Earth Exports to the U.S., the U.S. May Impose Punitive Tariffs of Up to 200% on Chinese Goods Exported to the U.S.”

On the local time of August 25, U.S. President Trump made tough remarks at the White House, stating that “if China continues to maintain restrictions on rare earth exports to the U.S., the U.S. may impose punitive tariffs of up to 200% on Chinese goods exported to the U.S.” This highly provocative statement quickly attracted intense attention from the international community. It not only reflects the escalating conflicts between China and the U.S. in the field of strategic key resources but also highlights the in-depth contradictions between major-power games and industrial security under the current global geopolitical and economic landscape.

“We hold amazing leverage, but I am reluctant to use it. If we really have to act, we will definitely deal a greater blow to China,” Trump said.

Since Trump returned to office, the U.S. government has continued to use tariffs as a tool to put pressure on China, attempting to restructure bilateral economic and trade relations through economic means. Although China and the U.S. have gone through multiple rounds of high-level economic and trade consultations and gradually reduced tariff rates to a more moderate range, there are still structural differences on core issues such as intellectual property protection and industrial policies. Especially in the field of rare earth resources, disputes over China’s export policies have become a prominent conflict point in bilateral relations.

As strategic basic materials for modern high-end manufacturing, rare earth elements are widely used in key fields such as semiconductors, new energy vehicles, and national defense and military industries. The security of their supply is directly related to the industrial competitiveness and national security strategies of various countries. As the core hub of the global rare earth industry chain, China accounts for over 70% of global rare earth ore mining and more than 90% of the supply of deep-processed rare earth products. In recent years, based on considerations of sustainable resource utilization and ecological and environmental protection, China has implemented full-chain management over the mining, smelting, and export of rare earths in accordance with the law. This policy adjustment, which is in line with international common rules, has been unilaterally interpreted by the U.S. as “economic coercion” and triggered a strong policy backlash from the U.S.

The ultra-high tariff threat proposed by the Trump administration is essentially an attempt to force China to relax its rare earth export controls through extreme pressure, so as to ensure the supply chain security of the U.S. advanced manufacturing industry. However, such trade policies dominated by a zero-sum game mindset will not only make it difficult to achieve the expected policy goals but also may cause a systemic impact on the global industrial division of labor system. Reviewing the historical experience of trade frictions initiated during Trump’s first term, his tariff policies directly led to a significant rise in U.S. domestic inflation, a decline in consumers’ actual purchasing power, and at the same time increased the cost pressure on local enterprises. If large-scale tariff barriers are imposed again, it is highly likely to trigger a more severe economic backlash effect.

From the perspective of international policy coordination, such extreme trade propositions face multiple constraints. Earlier, the U.S. Treasury Department proposed an initiative for joint tariff actions against China at the G7 Finance Ministers’ Meeting, but it did not receive substantial responses because major economies such as the EU and Japan generally worried about the negative spillover effects of “economic decoupling.” Against the backdrop of deep integration of global value chains, any unilateral act that deviates from multilateral trade rules will face collective prudent assessment and resistance from the international community.

Up to now, China’s foreign affairs authorities have not made an official response to this incident. However, based on the practical experience of dealing with trade disputes in the past, the Chinese government will continue to uphold the principle of “firmly safeguarding national core interests and conducting dialogue and consultation in a rational manner.” On the premise of adhering to the sustainable development and utilization of resources, China will properly handle policy differences with the U.S. in the field of rare earths through diplomatic channels and within the framework of international rules.