Trump warns China of 200% tariff if rare earth magnet exports curbed

US President Donald Trump stresses desire for 'great relationship' with Beijing despite escalating tensions over tariffs and resources

US President Donald Trump on Monday said the US will maintain a “great relationship” with China, stressing that he would not take steps that could destabilise the country.

‘Not going to destroy China’

Speaking alongside South Korean President Lee Jae Myung during a bilateral meeting, Trump told reporters: “We are going to have a great relationship with China… They have some cards. We have incredible cards, but I don’t want to play those cards. If I play those cards, that would destroy China. I am not going to play those cards.”

#WATCH | Washington DC | "We are going to have a great relationship with China...They have some cards. We have incredible cards, but I don't want to play those cards. If I play those cards, that would destroy China. I am not going to play those cards" says US President Donald… pic.twitter.com/PDlNPkkmm2

— ANI (@ANI) August 25, 2025

Trump’s remarks came after Washington and Beijing agreed on August 12 to extend their trade truce by 90 days, giving negotiators additional time to resolve disputes that have persisted for over a year. 

 

Rare earths and energy disputes

Tensions are not limited to tariffs. Trump warned China against curbing rare earth supplies, saying that unless Beijing continued to ship essential magnets to the US, tariffs as high as 200 per cent could be imposed. China has already tightened rare earth exports as part of its retaliation strategy.

 

Trump claimed the US had greater leverage in trade disputes, pointing to airplane components as a countermeasure to Beijing’s restrictions on rare earths.

 

China curtailed rare-earth magnet shipments to the US in April, using its near-90 per cent control of global output to pressure American manufacturers. Flows resumed under the trade truce, with July exports hitting a six-month high. 

 

Trump acknowledged China’s strategy to dominate rare earth mining but emphasised US strength in aviation. He said Beijing had 200 grounded jets due to withheld Boeing parts, which he later released. “I could have held them back, but I didn’t because of the relationship I have. And they’re flying,” he said.

 

“If we want to put 100 per cent, 200 per cent tariffs on, we wouldn’t do any business with China. And you know, it would be OK too, if we had to,” he said. “But the magnet situation, we have tremendous power over them, and they have some power over us.”

 

Trump also suggested that the US was making progress in developing its own supply chain, saying it could take “about a year to have the magnets,” though he offered no further details.

Executive action on tariffs with China

Earlier this month, Trump signed an executive order “further modifying reciprocal tariff rates” with Beijing, citing constitutional authority and provisions under the International Emergency Economic Powers Act and the National Emergencies Act. 

 

The order, he argued, was necessary to address what he called a lack of reciprocity in trade ties and the resulting economic and security concerns.

A series of orders

The move forms part of a series of tariff-related executive measures issued this year.

• On April 2, Executive Order 14257 declared persistent US trade deficits with China a “threat” to national security and imposed new duties.
• Later that month, Executive Orders 14259 and 14266 raised tariffs after Beijing retaliated.
• In May, Executive Order 14298 temporarily suspended fresh tariffs for 90 days.

That pause was set to expire on August 12 but was extended until November 10 through a new directive signed earlier this month. The order also instructed federal agencies to ensure strict enforcement and noted it did not create any legal rights or benefits enforceable against the US government.

 

(With inputs from agencies)