US President Donald Trump reiterated his threat to impose a 200% tariff against China “if they don’t give us magnets”. He also claimed that 200 planes in the other country were currently unable to fly because the US was deliberately withholding parts as leverage. The remarks threaten to undo the precarious truce between the world’s largest economies — currently paused after a furious tit-for-tat trade war earlier this year.
US President Donald Trump had sparked global unrest after announcing sweeping reciprocal tariffs against nearly all imports from more than 180 countries. This development soon escalated into a trade war with China — with Washington imposing baseline tariffs as high as 145% on Chinese imports and China retaliating with tariffs up to 125% on US goods.
‘Give us magnets or else…’
“They have to give us magnets, if they don’t give us magnets, then we have to charge them 200% tariffs or something…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 told reporters on Monday night.
China dominates rare earth production with control over approximately 90% of the global supply. It also maintains a strong grip on the complex processes used to refine the raw ores into industry-ready material. These rare earths are used extensively by the tech industry as well as electronic vehicle makers, manufacture of renewable energy devices and more. This has given China a significant edge in recent trade negotiations with the United States. The latter relies heavily on on the rare-earth magnets for its large manufacturing sector — especially automotive, electronics and renewable energy.
Xi focuses solidarity with India, China
Meanwhile Chinese President Xi Jinping appears to be focusing on a grand show of solidarity with Russia and India ahead of the SCO Summit. More than 20 world leaders will gather in Beijing next week for the regional security forum. The developments come even as India braces for 50% tariffs from August 27 and sanctions-hit Russia faces growing pressure to end its war in Ukraine. Moscow hopes trilateral talks with China and India will take place soon.
The summit will also feature Indian Prime Minister Narendra Modi’s first visit to China in more than seven years as the two neighbours work on further defusing tensions roiled by deadly border clashes of 2020.