Trump Threatens China: Either Magnets... or 200% Tariffs

Trump's Tariffs Are an Earthquake Shaking the Global Economy

Trump and China: A Declared Conflict and a Hidden Deal of Interests

US President Donald Trump warned of imposing steeper tariffs on China if Beijing restricts its exports of rare earth magnets, a threat that could derail the fragile trade truce between the world's two largest economies.

"They have to supply us with magnets, and if they don't, we'll have to put a 200 percent tariff or something like that," Trump told reporters after meeting with South Korean President Lee Jae-myung at the White House. Trump added that aircraft spare parts represent an important leverage Washington wields against China's dominance of rare earths, noting that "200 Chinese planes couldn't take off because we intentionally didn't supply them with Boeing parts because they didn't supply us with magnets."

Boeing is working on a deal to sell up to 500 aircraft to China, with the two sides currently finalizing details including aircraft models, types, and delivery schedules, according to a report by Bloomberg News. This highlights the pivotal role aircraft play in any potential trade agreement between Washington and Beijing.

Trump's remarks come as recent government data indicates that China's exports of rare earth magnets have returned to pre-restriction levels in April. Magnet shipments to the United States surged more than sevenfold (660 percent) in June compared to the previous month, with a 76 percent month-on-month increase in July.

China controls approximately 90 percent of global production of rare earth magnets and also controls the refining of the minerals used in their manufacture, giving it significant leverage in trade negotiations with Washington, which relies heavily on these magnets in major manufacturing sectors, particularly automotive, electronics, and renewable energy. Henry Wang, founder and president of the Center for China and Globalization, a Beijing-based think tank, said Trump's off-the-cuff remarks reflect his desire to advance trade cooperation with China and reach an agreement.

Wang, a former advisor to the State Council, added: "He's exaggerating... He's always talking loudly about potential tariffs or sanctions, but we shouldn't be swayed by the media rhetoric. The real test is the efforts of both sides to implement the agreements." The Wall Street Journal reported that China's chief trade negotiator, Li Qinggang, will travel to Washington this week for meetings with US Trade Representative Jameson Greer and senior US Treasury officials.

In June, Washington and Beijing reached a trade framework that included easing restrictions on Chinese exports of rare earths, along with scaling back some US restrictions on technology exports to China. The two sides agreed to reduce mutual tariffs to about 55 percent on US goods and 32 percent on Chinese goods, in a temporary truce scheduled to expire in mid-November.

Alfredo Montufar-Hello, managing director of consulting firm Greenpoint, said that the continuation of the trade truce beyond its November expiration date will depend on continued bilateral engagement between the two countries, adding that Li's upcoming meetings could pave the way for high-level negotiations and sustainable solutions to ease tensions.