Beijing blames US for elevating commerce tensions, defends uncommon earth curbs

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BEIJING/HONG KONG (Reuters) -China known as U.S. President Donald Trump's newest tariffs on Chinese language items hypocritical on Sunday and defended its curbs on exports of uncommon earth parts and tools, however stopped wanting imposing new levies on U.S. merchandise.

Trump on Friday responded to Beijing's most up-to-date export controls by imposing extra tariffs of 100% on China's U.S.-bound exports, together with new export controls on important software program by November 1.

The revived commerce tensions have rattled Wall Road, sending Huge Tech shares tumbling, frightened international corporations depending on China's manufacturing of processed uncommon earths and uncommon earth magnets, and will derail a summit between Trump and Chinese language President Xi Jinping tentatively scheduled for later this month.

RESPONDING TO TRUMP

The Chinese language commerce ministry's assertion on Sunday was Beijing's first direct response to Trump's prolonged Reality Social publish on Friday, the place he accused Beijing of out of the blue elevating commerce tensions after an uneasy truce was reached six months in the past between the world's two largest economies, permitting them to commerce items with out sky-high tariff charges.

"Our relationship with China over the previous six months has been an excellent one, thereby making this transfer on Commerce an much more shocking one," Trump mentioned.

The commerce ministry mentioned in an equally prolonged assertion that its export controls on rare-earth parts adopted a sequence of U.S. measures since bilateral commerce talks in Madrid final month.

Beijing cited the addition of Chinese language corporations to a U.S. commerce blacklist and Washington's imposition of port charges on China-linked ships as examples.

"The U.S. actions have severely harmed China’s pursuits and undermined the environment of bilateral financial and commerce talks, and China is resolutely against them," the ministry mentioned.

Beijing stopped wanting explicitly connecting these U.S. actions to its export curbs on rare-earth parts, saying they had been motivated by concern about these supplies' army purposes at a time of "frequent army conflicts".

It additionally held off on asserting a corresponding levy on China-bound U.S. imports, not like earlier within the 12 months, when each superpowers progressively ratcheted up tariffs on one another till the U.S. fee was 145% whereas China's was 125%.

'PATH FOR NEGOTIATIONS'

China's resolution to not instantly reply in form to Trump's opening salvo on this newest spherical of commerce tensions may go away the door open for each international locations to barter a de-escalation, analysts mentioned.

"By clarifying the rationale behind its retaliatory measures, Beijing can also be outlining a possible path ahead for negotiations. The ball is now within the U.S. court docket," mentioned Alfredo Montufar-Helu, managing director at strategic advisory agency GreenPoint.

However Hutong Analysis mentioned in a be aware on Saturday that if Beijing chooses not to reply to Trump's 100% tariff hike, it might sign that it now not prioritises a long-term cope with him, reflecting diminished confidence in his means to restrain hawks or keep on with commitments.

"Key watchpoints now: Whether or not Beijing strikes to freeze or complicate the TikTok sale, given its political symbolism. Continuing with the sale beneath present circumstances could be seen as a serious concession (from Beijing)," the analysis agency mentioned.

Different instruments in Beijing's arsenal embody regulatory motion concentrating on U.S. corporations. China's State Administration for Market Regulation (SAMR) mentioned final month main U.S. AI chip producer Nvidia violated the nation's anti-monopoly regulation, throughout U.S.-China commerce talks in Madrid.

The market regulator on Friday introduced an antitrust investigation into U.S. chip producer Qualcomm over its June 2025 acquisition of Israeli chip designer Autotalks.

A number of hours after the commerce ministry's response to Trump's publish and tariff hike, SAMR mentioned Qualcomm had accomplished the acquisition with out informing the regulator, including that the U.S. agency had acknowledged this.

"Primarily based on clear info and conclusive proof, our bureau lawfully initiated an investigation into Qualcomm's illegal...acquisition of Autotalks," SAMR mentioned.

CHINA SAYS EXPORT CONTROLS ARE NOT EXPORT BANS

The commerce ministry additionally countered Trump's narrative that China was utilizing its dominance in processed uncommon earths and uncommon earth magnets to assault all international locations, not simply the U.S.

"Now we have been contacted by different International locations who're extraordinarily offended at this nice commerce hostility, which got here out of nowhere," Trump mentioned on Friday on Reality Social.

China produces over 90% of the world's processed uncommon earths and uncommon earth magnets. The 17 uncommon earths are important supplies in merchandise starting from electrical autos to plane engines and army radars.

Exports of 12 of them are restricted after China's commerce ministry on Thursday added 5 - holmium, erbium, thulium, europium and ytterbium - together with associated supplies.

The commerce ministry assertion on Sunday sought to reassure international corporations spooked by the most recent export curbs, promising to advertise compliant commerce by granting general-purpose licenses and license exemptions.

"China's export controls will not be export bans," it mentioned. "Any export purposes for civilian use that adjust to laws will likely be authorized, and related enterprises needn't fear."