• United States
• China
• Christina Lu

October 10, 2025, 3:32 PM View Comments ()

U.S. President Donald Trump on Friday threatened to unleash new tariffs on China and cast doubt over a potential meeting between him and Chinese President Xi Jinping later this month in South Korea, further escalating a now monthslong trade spat between the two powers. 

Trump’s threats came after China sharply expanded its export controls for rare earths, the powerful materials that underpin everything from semiconductors and clean energy technologies to the U.S. defense industry. Beijing dominates the world’s rare-earth supply chains, commanding about 85 percent of processing and 92 percent of magnet production. That has given it key leverage that it’s harnessed in multiple rounds of negotiations after Trump first launched his trade war in April. 

Under Beijing’s new controls, which are set to take force on Dec. 1, foreign firms must secure approval from the Chinese government to export magnets and certain semiconductor materials that include at least 0.1 percent Chinese rare earth content. The moves will “safeguard national security and interests,” the Chinese Ministry of Commerce said in its announcement.

In particular, export licenses with military purposes are not likely to receive approval, according to the ministry. The ministry will approve export applications involving artificial intelligence and semiconductors on a case-by-case basis. In a separate announcement, Beijing also unveiled fresh export controls targeting the battery supply chain, which are set to begin on Nov. 8. 

The moves, if implemented fully, amount to a dramatic escalation of a trade spat between the world’s two biggest economies, industry experts said. 

“These are the most stringent export restrictions on rare earths that China has imposed,” said Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies. “These magnets are crucial for our defense technologies, and by making it near impossible for defense companies and the military to access them, it cripples our industrial base,” Baskaran said. 

The series of moves was certain to ratchet up the pressure between Beijing and Washington ahead of expected upcoming talks between Xi and Trump in South Korea at the Asia-Pacific Economic Cooperation forum, which starts on Oct. 31. But after Beijing’s latest measures were announced, Trump said in a post on Truth Social that “now there seems to be no reason” to meet his Chinese counterpart. “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,” he declared. 

In his post, Trump added that Beijing had sent letters to other countries announcing its new curbs. “Dependent on what China says about the hostile ‘order’ that they have just put out, I will be forced, as President of the United States of America, to financially counter their move,” he said.

That could include steeper tariffs, he said. “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,” Trump wrote. “There are many other countermeasures that are, likewise, under serious consideration.”

Chris McGuire, who formerly served at the National Security Council and U.S. Department of State under the Biden and Trump administrations, said that Washington has significant levers that it could pull, particularly with regard to semiconductor chip supply chains. While the United States has previously imposed narrowly targeted controls on select semiconductors, he said, Washington has the power to go even further.

“If the Chinese are going to try to threaten to shut down our entire semiconductor ecosystem with rare-earth controls—if they’re actually intent on doing that—then they should be aware that we have the ability to extend this into a much broader swath of their commercial ecosystem as well,” he said. 

Some lawmakers have pushed for other forms of pressure. In January, Republican Rep. John Moolenaar, the chairman of the House select committee on China, and Democratic Rep. Tom Suozzi introduced legislation aimed at revoking China’s permanent normal trade relations status. (Republican Sens. Tom Cotton and Jim Banks introduced companion legislation in the Senate.) In September, Moolenaar also urged the Trump administration to launch a coordinated effort with U.S. allies to jointly squeeze Beijing by targeting China’s commercial aviation landing rights, commercial aerospace parts and services, and outbound investment.

In response to China’s latest announcement, Moolenaar reiterated those calls in a statement on Thursday. “China has fired a loaded gun at the American economy,” he said.