Trump warns China of 200% tariff amid trade truce

U.S. President Donald Trump on Monday threatened to impose tariffs of up to 200% on China if Beijing restricts exports of rare-earth magnets, casting fresh uncertainty over a fragile trade truce between the world’s two largest economies.

“They have to give us magnets; if they don’t give us magnets, then we have to charge them 200% tariffs or something,” Trump told reporters at the White House after a meeting with South Korean President Lee Jae Myung.

Rare-earth magnets are critical to U.S. industries ranging from automotive and electronics to renewable energy. China controls roughly 90% of global production, giving Beijing leverage in ongoing trade talks.

Trump suggested that Washington was prepared to use airplane parts as a counterweight in the dispute. “200 of their planes were unable to fly because we were not giving them Boeing parts purposely because they weren’t giving us magnets,” he said.

Boeing has been working on a deal to sell as many as 500 aircraft to China, according to Bloomberg, underscoring the role of aerospace cooperation in the broader negotiations.

The warning comes as Chinese exports of rare-earth magnets to the U.S. have rebounded. Government data shows shipments surged more than seven times, 660% in June compared to May, and volumes climbed 76% in July.

In June, Washington and Beijing reached a trade framework that included easing Chinese export controls and a partial rollback of U.S. tech restrictions. Both sides also agreed to lower tariffs on each other’s goods to about 55% and 32%, respectively. The temporary truce is due to expire in mid-November.

Henry Wang, founder and president of the Centre for China & Globalisation, said Trump’s tough language was likely aimed at pushing forward talks rather than signalling immediate action. “He’s bluffing. He always talks big on tariffs or potential punishment, but we shouldn’t get caught up in the rhetoric,” said Wang, who previously served as a counsellor for China’s state council. “The real test should be on both sides’ efforts in implementing their agreements.”

China’s embassy in Washington did not respond to a request for comment.

Meanwhile, senior Chinese trade negotiator Li Chenggang is expected in Washington this week for discussions with U.S. Trade Representative Jamieson Greer and Treasury officials, the Wall Street Journal reported. Analysts say the meetings could set the stage for higher-level negotiations that determine whether the fragile truce can be extended.

“Whether the trade truce holds beyond its November deadline will hinge on continued bilateral engagement,” said Alfredo Montufar-Helu, managing director at advisory firm GreenPoint. “Li’s upcoming meetings could lay the groundwork for enduring solutions to ease the tensions.