What one congressman has called an “economic declaration of war” has prompted President Donald Trump to threaten China with a massive tariff increase and to hint that he may cancel an upcoming meeting with Chinese President Xi Jinping.
On Thursday, China issued new rules, effective Dec. 1, requiring foreign companies to get a license to export any product with any amount of rare earth materials, which are essential to making most high-tech products, including fighter jets, as noted by The New York Times.
New limits on technology and equipment used to refine minerals or make electric vehicle batteries are also being imposed.
About 70 percent of the world’s rare earth materials are mined by China, which processes about 90 percent of the global supply of these materials.
China’s new policy led Republican Rep. John Moolenaar of Michigan to explode.
“China’s action today is an economic declaration of war against the United States and a slap in the face to President Trump amid his efforts to fight for a level playing field.
“China has fired a loaded gun at the American economy, seeking to cut off critical minerals used to make the semiconductors that power the American military, economy, and devices we use every day including cars, phones, computers, and TVs,” the chair of the Select Committee on China wrote in a statement posted on the panel’s website.
Trump focused attention on the crisis in a post on Truth Social.
“Some very strange things are happening in China!” Trump wrote. “They are becoming very hostile, and sending letters to Countries throughout the World, that they want to impose Export Controls on each and every element of production having to do with Rare Earths, and virtually anything else they can think of, even if it’s not manufactured in China.
“Nobody has ever seen anything like this but, essentially, it would ‘clog’ the Markets, and make life difficult for virtually every Country in the World, especially for China. We have been contacted by other Countries who are extremely angry at this great Trade hostility, which came out of nowhere,” he wrote.
Trump said he had been worried that relations with China were too good to be true.
“Our relationship with China over the past six months has been a very good one, thereby making this move on Trade an even more surprising one. I have always felt that they’ve been lying in wait, and now, as usual, I have been proven right!
“There is no way that China should be allowed to hold the World ‘captive,’ but that seems to have been their plan for quite some time, starting with the ‘Magnets’ and, other Elements that they have quietly amassed into somewhat of a Monopoly position, a rather sinister and hostile move, to say the least,” he wrote.
Trump said he does not plan to lie down and take it, writing “the U.S. has Monopoly positions also, much stronger and more far reaching than China’s. I have just not chosen to use them, there was never a reason for me to do so — UNTIL NOW! “
“For every Element that they have been able to monopolize, we have two. I never thought it would come to this but perhaps, as with all things, the time has come. Ultimately, though potentially painful, it will be a very good thing, in the end, for the U.S.A,” Trump wrote.
“One of the Policies that we are calculating at this moment is a massive increase of Tariffs on Chinese products coming into the United States of America. There are many other countermeasures that are, likewise, under serious consideration,” he wrote.
Trump said talks with Xi seem pointless.
“I have not spoken to President Xi because there was no reason to do so. This was a real surprise, not only to me, but to all the Leaders of the Free World. I was to meet President Xi in two weeks, at APEC, in South Korea, but now there seems to be no reason to do so,” he wrote.
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