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China has accused the US of “seriously violating” the trade ceasefire between the two powers, and vowed to take strong measures to protect its interests so tensions rekindle.
China and the US agreed to a deal that temporarily cuts tariffs for Tatts, which had risen 145% during talks held in Geneva in early May.
President Donald Trump on Friday argued that China has “completely violated” the agreement as U.S. officials have become increasingly irritated by the slippery pace of rare earth exports throughout the Pacific since the May 12 agreement.
However, on Monday, China’s Commerce Department accused Washington of introducing “a set of discriminatory and restrictive measures” in recent weeks that undermined the Geneva consensus and erod “China’s legitimate rights and interests.”
“If the US insists on its own path and continues to undermine China’s interests, China will continue to take strong and decisive steps to protect its legitimate rights,” the ministry said.
Among the US actions cited in the statement were warnings against the use of global Huawei chips, suspension of sales of chip design software to Chinese companies, and cancellation of visas for Chinese students.
The rising tensions have lowered Asian markets. Hong Kong’s Hangsen Index and Japan’s Nikkei 225 fell by 1.5% and 1.3%, respectively. The offshore yuan weakened 0.1% to 7.21 dollars per dollar. Mainland China stock markets have been closed due to public holidays.
US officials thought the May 12 transaction would unlock China’s export restrictions on rare earths announced in early April, but China instead slowly approved shipments to the US, maintaining its export regime.
Critical minerals are widely used in American automobiles, electronics and defense supply chains, and slow exports to the US are increasingly threatening to stop work for US manufacturers.
“The United States has unilaterally sparked new trade frictions,” China’s Commerce Department said. “Instead of looking back at its own actions, it patiently accused China of violating the consensus,” the ministry added.
Trump told reporters Friday that he wanted to resolve the conflict in a call with Chinese President Xi Jinping. This is an idea that he has come up with several times in recent months but has yet to come to fruition.
US officials, including Treasury Secretary Scott Bescent, said Sunday that they hope the two leaders will speak soon. Bescent told CBS he is confident that Trump and XI will be able to resolve the rare earth differences in future calls. White House officials said a call should be made this week.
“What China is doing is that they are holding back products essential to the industrial supply chain of Europe in India, and that’s not something that a trusted partner does,” he said.
“The fact that they withhold some of the products they agreed to release during our agreement, maybe it’s a glitch in the Chinese system. Maybe it’s intentional. We’ll see the president speak to the party chair,” he said.
Additional reports by Arjun Neil Alim
