President Donald Trump on Friday said there appears to be “no reason” to meet with Chinese leader Xi Jinping during his upcoming trip to South Korea, while threatening a “massive increase” in tariffs after China moved to tighten export controls on rare earth elements. Trump made the remarks in a post on his Truth Social platform.
Trump accused China of attempting to “hold the global economy hostage” after Beijing expanded controls over rare earth exports, materials critical for industries ranging from electronics to defense.
He said one of the Policies that they are calculating at the moment was a massive increase of Tariffs on Chinese products coming into the United States of America. He said ”There are many other countermeasures that are, likewise, under serious consideration.”
These rare earth elements are essential to manufacturing electric vehicles, semiconductors, aerospace components, and military systems. It is a well know fact that China dominates global processing and export of these materials, making any change in policy regarding these rare earth elements deeply consequential for supply chains worldwide.
Read Also: President Trump: Morality Is Deeply Rooted In Divine Judgement
In recent developments, Beijing’s new export regime requires licenses for shipments, especially those tied to defense or semiconductor uses, and have also applied stricter vetting to foreign users of Chinese components. Immediately after Trump’s statement, there was a swift reaction on the market: U.S. equities tumbled, with the S&P 500 falling about 1.6 %, while the Nasdaq dropped by over 2 %.
Before the restrictions placed by China, there was a meeting that had been expected to happen between Trump and Xi on the sidelines of the APEC summit in South Korea. But Trump’s announcement shows that he may cancel or postpone it in light of the new trade escalation.
Aready this week, China imposed additional port fees on U.S. ships and extended export limits on key minerals, including gallium and germanium — both critical for the production of semiconductors, electric vehicles, and defence technologies. The move, which Beijing described as a matter of “national security and resource management,” is widely seen as a countermeasure to Washington’s growing restrictions on Chinese access to advanced chips and manufacturing equipment. U.S. importers have warned that the new port surcharges could raise shipping costs and disrupt supply chains just as global trade routes were beginning to stabilise.
Africa Digital News, New York.
