Crucial trade talks between the US and China are stalling over the resumption of vital rare-earth mineral exports, which China has a global monopoly over.
The Wall Street Journal and CNBC both report that President Trump and his trade team are growing frustrated at Chinese refusal to speed up approvals for rare-earth minerals, which are vital to the production of a wide range of goods.
The issue of access to rare-earth metals was central to the truce brokered between the world’s two largest economies earlier this month, in Geneva. China’s envoy He Lifeng agreed to a last minute suspension of US tariffs, in exchange for the resumption of exports of rare-earth metals.
The temporary truce, reached two weeks ago, resulted in a 90-day end to the 100%+ tariffs that both countries had imposed on each other. Markets reacted with great relief to the truce.
On Friday, President Trump accused China of violating this agreement, although he didn’t say how.
“Because of this deal, everything quickly stabilized and China got back to business as usual,” Trump wrote on Truth Social.
“Everybody was happy! That is the good news!!! The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!”
Privately, American companies, especially carmakers, are warning that any prolonged disruption to the supply of rare-earth metals could lead to production shutdowns like during the pandemic.
Beijing’s unwillingness to resume exports quickly may have something to do with a recent warning issued by the US Commerce Department against the use of Huawei’s artificial-intelligence chips.
China has criticized the US sharply for increasing “its pressure on China’s semiconductor industry.”
In related news, Defense Secretary Pete Hegseth has warned Beijing’s threat to Taiwan is “real” and a Chinese invasion of the disputed island could be “imminent.”
Speaking at the Shangri-La Dialogue, a security summit in Singapore, Hegseth said that China is “actively training” all the time for an invasion of Taiwan. China is “rehearsing for the real deal.”
“We are not going to sugarcoat it,” Hegseth remarked.
“The threat China poses is real. And it could be imminent.”
A delegation from Beijing was conspicuous in its absence from the summit, which Hegseth interpreted as a snub.
“We are here this morning. And somebody else isn’t,” he said.
Hegseth pushed America’s allies in the region to aim for defense spending at 5% of GDP, similar to the increased requirement for NATO members being demanded by the US.
“We must all do our part,” Hegseth said.