US President Donald Trump has issued a warning of a 200% tariff on rare-earth magnets if China refuses to continue exporting these materials to America. This threat comes amidst the extension of a trade truce between the two nations.
Trade Truce Extended – But Tensions Remain
On August 12, the US and China agreed to extend their trade truce for 90 days, allowing negotiators more time to resolve long-standing disputes. Since April, Washington has repeatedly raised taxes on Chinese goods, with some tariffs reaching as high as 145%. Most Chinese imports currently face a 30% tax, while China retaliated with a 10% levy on US products. Despite the pause in the trade war, tensions continue to simmer, particularly around rare-earth materials.
Why Trump Threatened a 200% Tariff on Chinese products
Trump asserts that the Chinese government controls rare-earth magnets that are vital for the US. These magnets are essential for cars, EVs, chips, and defense technology. He fears that America's dependence on Chinese supply creates risks for national security and jobs. The high tariff threat is a tactic aimed at compelling Beijing to keep exports flowing without restrictions.
Trump’s Strategy: Pressure, Power & Politics
Trump made his announcement during a meeting with South Korean President Lee Jae Myung in Washington. He claimed that 'We have incredible cards, but I don’t want to play them. If I did, it would destroy China.' He also hinted at a potential visit to China in the near future, aiming to show toughness and protect US jobs while ensuring supply chain steadiness.
This latest move shows Trump is ready to raise the heat on China if America's access to rare-earth magnets is blocked. Whether the 200% tariff threat becomes a reality or remains a negotiation tool, it is clear that the US-China trade war is far from over.
