President Donald Trump has warned Beijing that the United States will impose a 200 per cent tariff if China refuses to supply it with rare-earth magnets, escalating tensions in an ongoing trade dispute between the world’s two largest economies.
“They will have to give us magnets, if they don’t give us magnets, we will have to charge them a 200 per cent tariff… or something,” Trump said on Monday, speaking to reporters in the Oval Office ahead of a bilateral meeting with South Korean President Lee Jae Myung.
The warning came even as Trump insisted that Washington and Beijing would maintain a strong relationship.
“They [China] 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,” he said.
Trump accused China of taking “a monopoly of the world’s magnets” by steering global reliance on them over the past two decades.
“Nobody needed magnets until they convinced everybody 20 years ago, ‘let’s all do magnets.’ There were many other ways that the world could have gone. It will probably take us a year to have them… we’re heavily into the world of magnets now,” he added.
Rare-earth magnets, particularly neodymium-iron-boron (NdFeB) magnets, are a critical component in electric vehicle manufacturing.
They generate the powerful magnetic fields needed for traction motors, power steering systems, braking systems and other functions. China currently dominates global production, leaving much of the industry dependent on its exports.
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The United States and China have been locked in a tariff battle since April, when the Trump administration imposed a 145 per cent levy on Chinese goods. Beijing retaliated with a 125 per cent tariff on American exports.
In recent months, both sides agreed to ease restrictions, with US duties reduced to 30 per cent and China imposing a 10 per cent levy.
Earlier this month, Trump signed an order extending a tariff truce with China by 90 days, just hours before higher duties were due to take effect.
The temporary pause was first announced in May after talks in Geneva, where both sides agreed to allow further negotiations. Follow-up discussions in Stockholm in late July ended without a fresh agreement.
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