The United States has warned that steep tariffs could soon be imposed on China if Beijing proceeds with its newly announced restrictions on rare earth exports, heightening concerns of another trade confrontation between the two largest economies in the world. U.S. Trade Representative Jamieson Greer said Tuesday that the decision now rests largely on China’s next actions, suggesting that the situation remains fluid in the run-up to a crucial diplomatic meeting later this month.
President Donald Trump has threatened tariffs of up to 100 percent on Chinese imports, a move that could significantly strain economic relations and reverberate across global markets. The warning follows Beijing’s announcement last week of sweeping export controls on rare earth elements — critical materials used in defense systems, semiconductors, and electric vehicles.
Greer described China’s move as a “major escalation,” arguing that it could disrupt vital supply chains across multiple industries. “A lot depends on what the Chinese do,” Greer said in an interview. “They are the ones who have chosen to make this major escalation.”
The United States depends heavily on Chinese rare earths for advanced technologies ranging from missile guidance systems to smartphones. Beijing’s decision to impose tighter export limits is widely viewed as an attempt to exert leverage amid rising geopolitical and economic competition. The restrictions, if enforced, could impede U.S. access to key materials like neodymium, dysprosium, and terbium — all essential to modern manufacturing.
In response, the Trump administration has prepared a tariff package that could effectively halt a substantial portion of U.S.-China trade. “We can’t have a situation where the Chinese keep this regime in place where they want to have veto power over the world’s high-tech supply chains,” Greer said, emphasizing that Washington aims to protect its long-term economic security.
The new measures surprised U.S. officials ahead of the scheduled meeting between Trump and Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation (APEC) summit in Seoul, South Korea. The meeting, meant to discuss regional economic stability, may now be overshadowed by escalating trade hostilities.
Greer confirmed that both leaders are still expected to meet, though he cautioned that plans could change depending on diplomatic progress. “Whether it will go through or not, I don’t want to precommit either ourselves or the Chinese,” he said. “But it makes sense for people to talk when they can.”
Senior officials from both sides met in Washington earlier this week to address the rare earth dispute. According to Greer, discussions remain “productive” despite public tensions. “We think we’ll be able to work through it,” he said, expressing cautious optimism about resolving the standoff before it escalates further.
Financial markets reacted sharply to the developments. On Friday, the U.S. stock market shed roughly $2 trillion in value following Trump’s initial tariff threat, reflecting investor anxiety over a potential breakdown in trade relations. Although markets have since stabilized, analysts warn that any sign of renewed confrontation could trigger volatility across global equities and commodities.
Greer acknowledged that the president is aware of the market’s reaction but said the administration’s focus remains on strengthening domestic manufacturing and reducing dependency on foreign supply chains. “We want to make sure that the market is responding to appropriate information,” Greer said. “You’ve seen the market settle out this week as they realize that the president and his team want to work with the Chinese.”
The escalating tension underscores the strategic importance of rare earth elements — a sector in which China has long held dominance. For Washington, the issue has evolved beyond trade, touching on questions of national security and technological independence. As the APEC summit approaches, the world will be watching to see whether dialogue between Trump and Xi can ease the impasse or further deepen the divide between two economic superpowers.
