The Trump administration is negotiating new trade terms with 130 countries as a result of the President’s “reciprocal” tariffs, which were recently paused for 90 days—except for the tariffs against China.
National Economic Council Director Kevin Hassett told CNN’s Jake Tapper that the “reciprocal” tariffs are a way to bring trade partners to the table, dismissing the idea the tariffs were implemented on a “capricious whim.”
“The whole point of the trade policy is to address the national emergency that we’re too dependent on foreign products in the U.S., especially if we were at a time of conflict and we’re doing something about that,” Hassett said.
“The reciprocal act was basically, guys, if you come to the table and negotiate us with us and treat us the same way we treat you, then we’ll you’ll get your rate really low. And so right now 130 countries, 130 countries have responded, and we’re negotiating with them. And they’ve got their rate down to 10%.
Hassett went on to describe how the tariffs have created a “two-world system,” where smaller trade partners negotiate with the US and tariffs are lowered on the one hand, and where a longer term strategy to counter China’s economic power begins to be implemented.
“There’s a process about China that’s very, very nascent, if at all, and then the process for everybody else,” Hassett said.
“So the process for everybody else is orderly. It’s clear, people are coming to town with great, great offers.”
In response to President Trump’s imposition of “reciprocal” tariffs that began on 2 April, China has halted all exports of a range of rare-earth minerals, threatening the supply of key components necessary to the manufacture of cars, planes, electronic goods and military equipment.
Two days after President’s Trump’s announcement, the Chinese government ordered restrictions on the export of six rare-earth metals that are refined entirely in China and rare-earth magnets, 90% of which are produced in China. These metals and magnets can now only be shipped out of China with special export licences.
Exports are being blocked not only to the US, but to all other countries.
As The New York Times notes, “Rare earth magnets make up a tiny share of China’s overall exports to the United States and elsewhere. So halting shipments causes minimal economic pain in China while holding the potential for big effects in the United States and elsewhere.”
China has yet to fully implement the licensing system, meaning it could take months or longer for exporters to be able to gain a licence and current supplies of the metals and magnets outside China could run dangerously low.
The size of emergency stockpiles of these items varies significantly, so production disruptions are hard to predict.
President Trump made the imposition of tariffs a certain plank of his economic policy during the election. Since his inauguration in January, he has levied special tariffs on Mexico and Canada for their role in the US fentanyl and immigration crises, and in recent weeks he announced a new round of “reciprocal” tariffs on many of the US’s larger and smaller trading partners.
President Trump raised his tariff against China to 125%, while pausing his increased reciprocal tariffs against other countries for 90 days.
“Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately,” Trump said on Truth Social.
“At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable.”