China on Sunday accused the United States of stoking renewed trade tensions with “hypocritical” tariff measures, defending its recent restrictions on exports of rare earth elements and related equipment, while signaling it would not immediately retaliate with fresh levies on American goods.
The sharp remarks from Beijing came two days after US President Donald Trump announced sweeping 100% tariffs on Chinese exports to the United States, along with new export controls on critical software due to take effect on November 1. The move reignited a trade conflict that had appeared to cool following months of uneasy truce between the world’s two largest economies.
The revived tensions have unsettled global markets, sending Wall Street indices tumbling and prompting concern among multinational manufacturers dependent on China’s dominance in processed rare earths and magnets — materials essential for electric vehicles, advanced weaponry, and consumer electronics. Analysts warned the spat could also derail a planned summit between Trump and Chinese President Xi Jinping later this month.
Beijing Responds to Trump’s Tariff Offensive
In its first formal reaction to Trump’s Truth Social post on Friday, China’s Ministry of Commerce rejected Washington’s accusations that Beijing had unilaterally escalated the trade conflict. The ministry said its export controls on rare earth materials were enacted “in accordance with law” and followed “a series of hostile US actions” in recent weeks.
According to the statement, the measures were partly a response to Washington’s addition of multiple Chinese firms to its trade blacklist and the imposition of port fees on China-linked shipping, which Beijing said had “undermined the atmosphere of bilateral economic and trade talks.”
“The US actions have severely harmed China’s interests and disrupted the environment for dialogue,” the ministry said. “China is resolutely opposed to such behavior.”
While Beijing avoided directly linking its rare earth curbs to the new US tariffs, it said the export controls were driven by national security concerns and the growing military use of these critical materials amid “frequent global conflicts.”
No Immediate Retaliation, But Warning Issued
Unlike previous rounds of the tariff war, Beijing stopped short of imposing reciprocal duties on US imports — a move seen by analysts as a strategic pause. In earlier escalations, both sides had incrementally raised tariff rates, reaching 145% for US imports to China and 125% for Chinese goods entering the US before the truce six months ago.
“Willful threats of high tariffs are not the right way to get along with China,” the commerce ministry said. “China’s position is consistent: we do not want a trade war, but we are not afraid of one.” The statement added that Beijing “would take corresponding measures” if Washington failed to change course.
Experts said China’s restraint may be a calculated attempt to keep diplomatic channels open.
“By clarifying the rationale behind its retaliatory measures, Beijing is signaling a willingness to re-engage,” said Alfredo Montufar-Helu, managing director at GreenPoint Advisory. “The ball is now in the US court.”
However, Hutong Research suggested that China’s lack of immediate response might also indicate waning confidence in Trump’s reliability. “If Beijing opts not to respond to the 100% tariff hike, it could suggest a shift away from pursuing long-term deals with his administration,” the research firm said. “Key watchpoints now include whether Beijing delays or blocks the politically charged TikTok sale, which could serve as a symbolic countermeasure.”
China Seeks to Reassure Global Markets
In a bid to calm foreign investors and partners, Beijing emphasized that its export restrictions were not intended as a blanket ban. China currently produces over 90% of the world’s processed rare earths, which are critical inputs for industries ranging from renewable energy to defense manufacturing.
“The claim that China is weaponizing rare earths is unfounded,” the ministry said. “Our export controls are not export bans. Applications for civilian use that comply with regulations will be approved, and enterprises need not worry.”
The latest restrictions cover 12 types of rare earth materials, after five new elements — holmium, erbium, thulium, europium, and ytterbium — were added to the control list last week. Beijing said the curbs are intended to ensure responsible use and prevent the diversion of sensitive materials to military purposes.
Trump, however, accused China of “raising trade tensions out of nowhere” despite what he described as a strong bilateral relationship over the past six months. “Our relationship with China has been a very good one, which makes this move on trade even more surprising,” he wrote.
As both capitals trade accusations, analysts warn that prolonged uncertainty could disrupt global supply chains dependent on Chinese manufacturing, intensify inflationary pressures, and further strain diplomatic relations between Washington and Beijing.
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