(repeat from weekend)
BEIJING/WASHINGTON (dpa-AFX) – In the trade dispute between the USA and China, the fronts between the world’s two largest economies have hardened significantly. After President Donald Trump announced that he would impose further 100 percent tariffs on Chinese imports, Beijing accused the USA of “double standards” and threatened countermeasures.
“If the US stubbornly sticks to its course, China will resolutely take appropriate measures to protect its legitimate rights and interests,” said the Ministry of Commerce in Beijing. Washington has long generalized the principle of national security, abused export controls, used discriminatory measures against China and unilaterally expanded its jurisdiction over products such as semiconductors and computer chips, the accusation goes.
China calls for dialogue
China also accused the USA of disrupting global supply chains with its measures. Beijing is calling on the US to correct its “wrong approach”, uphold the results of past trade talks and resolve mutual concerns through dialogue, it said.
Trump had previously announced that he would impose additional tariffs from November 1st because of China’s recent trade policies and also threatened export controls on all important software, without giving further details. He also questioned a planned meeting with Chinese President Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in South Korea at the end of October.
However, the US President took a different tone again at the weekend. On the Truth Social platform, the Republican wrote: “Don’t worry about China, everything will be fine! The esteemed President Xi just had a bad moment. He doesn’t want a depression for his country, and neither do I. The USA wants to help China, not hurt!!!” How Trump arrived at this assessment initially remained unclear.
What had happened?
Trump was annoyed by Beijing’s announcement on October 9th, in which the Chinese announced that, among other things, they would only allow the export of further rare earths after approval. The Ministry of Commerce emphasized that exports for military purposes or to armies would generally not be permitted.
The authority argues that the measures are legitimate because they improve the export control system in accordance with the law. The ministry pointed to the importance of rare earths for military purposes and recurring conflicts around the world. “The aim is to ensure world peace and regional stability,” it said.
The approval process for rare earths does not only apply to US companies. European and German companies have also been worried for months about the timely delivery of important raw materials due to the complicated application process and long waiting times. According to the EU Chamber of Commerce in China, individual companies have already stopped production for a short time.
What role do rare earths play in the dispute?
China is a major global producer of rare earths and uses this as leverage in negotiations with the USA. The raw materials and the magnets made from them are needed in industry as well as the high-tech and defense sectors. Rare earths are found in smartphones, televisions but also in electric motors, semiconductors and turbines.
China has a high concentration of mineral resources. Contrary to what their name suggests, rare earths are not necessarily rare. But extracting the mineral resources is difficult and environmentally harmful because they are tied up in other raw materials. China has specialized in the procedure.
What could now follow?
Since the customs escalation in April, both sides have negotiated four times in major European cities. Since then, significantly lower tariffs have applied. The disputing parties also appeared to have come closer together on issues such as the deal to sell the video platform Tiktok.
But now the trade dispute is coming to a head again. If Trump carries out his threat, Chinese imports at the US border would be subject to tariffs of 130 percent combined with the current surcharges, which would likely bring trade to a standstill. According to experts, China is likely to hit back just as hard.
Disputes about much more than tariffs and raw materials
The showdown between the two great powers is no longer just about tariffs and raw materials. China has stopped buying soy from US farmers for a long time – a core Trump constituency who has thus lost their main customer. Meanwhile, Washington is cutting China off from important cutting-edge computer chip technology that the Chinese need for the development of artificial intelligence.
“The new escalation may be an expression of misjudgments on both sides,” analyzes Gabriel Wildau from the consulting firm Teneo. China may have tried to use its rare earth measures to improve its negotiating position for the meeting with Trump in South Korea. According to Wildau, Beijing could also have understood the US Department of Commerce’s export control list, which was expanded to include Chinese companies at the end of September, as an escalation. US officials saw this as merely a technical adjustment./jon/DP/men