US officials blast China's actions on rare earths

WASHINGTON:

Top US officials on Wednesday blasted China's major expansion of rare earth export controls as a threat to global supply chains, but said Beijing could still change course and avoid steps by Washington to decouple from the world's second-largest economy.

US Trade Representative Jamieson Greer told a press conference that China's new export restrictions were a "global supply-chain power grab" and the US and its allies would not accept the restrictions, but he and Treasury Secretary Scott Bessent stressed that Washington did not want to escalate the conflict.

Greer told reporters that China has not yet implemented the revised regulatory system for rare earths and could still back away, just as the US had not implemented a retaliatory 100% increase in tariffs on Chinese imports.

"These are drafted, or in draft, so it's quite real, but our expectation is that they won't implement this and that we'll be able to be back to where we were a week ago where we had the tariff levels we've agreed to and we have the flow of rare earths that we agreed to," Greer said.

The two countries appeared poised to return to an all-out trade war late last week, after China on Thursday announced the rare earth measures. Trump responded on Friday by threatening to raise tariffs on Chinese goods by 100%.

Bessent and Greer – who have met personally with senior Chinese officials four times in four different cities in recent months – have sought to get US-China ties back on track this week, emphasising their desire to avoid escalation in a series of interviews.

Bessent said US and Chinese officials, in Washington for the annual meetings of the International Monetary Fund and World Bank, were in close touch to set up the Trump-Xi meeting, adding that it was the level of trust between the two leaders that had prevented a further escalation of the trade conflict.