China holds a monopolistic level of control on the industrial processing of rare earth minerals.  The minerals themselves are not rare; it’s the processing of them into refined elements used in industrial electronic component manufacturing that gives China power.

The U.S. and China hold a current trade agreement saying, essentially, we will remain steady with the baseline tariffs in exchange for Beijing maintaining a consistent policy on the export of processed rare earth magnets and minerals.  The announcement of export controls by Beijing violated the terms of that trade agreement, and President Trump responded by announcing an additional retaliatory tariff of 100%, effective November 1st.

China then sent a clarification statement saying current licensing and trade agreements would be honored.  On his flight to Israel, President Trump said, “I think I know what happened, I know what happened” and downplayed the trade action.  U.S Trade Representative Jamieson Greer gives some background.  WATCH:

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