US President Donald Trump on Monday hinted that the US may levy 200% tariffs on China if the nation does not provide rare earth magnets, a vital component for the automotive, electronics, and defense sectors.
While appreciating China for "wisely" holding the world monopoly on these magnets, Trump threatened that denying them to the US can mobilize a drastic economic response.
"They have to provide us with magnets. If they don't provide us with magnets, we have to charge them (a) 200 percent tariff or something," Trump told a media briefing in the Oval Office.
Trump also pointed out that despite the close ties between the US and China, Washington has greater bargaining chips. "We have much bigger and better cards than they have.If I played those cards, that would be devastating for China. I'm not going to play those cards," he continued.
In April, China, which maintains near-monopoly control of magnets, limited exports of seven rare earth elements as a retaliatory measure against sweeping US tariffs. Trump two months later announced a trade deal between Washington and China, which involved the supply of rare earth minerals and magnets to Washington.
Even though Trump threatened the 200% tariffs, he did not indicate that China was necessarily going to withhold these materials. Laying out China's global position in rare earths, he made the argument that the US also has critical leverage through airplane parts and Boeing jets.
"200 Chinese jets were grounded because the US did not give them its critical parts beforehand," Trump stated. "I sent them all of the parts so their planes can fly.I might have held them back. I didn't do that because of the relationship that I have. And they're flying."
Trump's remarks follow closely after US Treasury Secretary Scott Bessent justified the move to not punish China for purchasing Russian oil, a factor which Trump touched on in warning 50% tariffs on Indian imports last month.
The US currently levies 30% duties on Chinese imports—10% as the minimum tariff and 20% as it pertains to fentanyl tariffs.
