US President Donald Trump said Chinese airlines were forced to keep 200 planes on the ground earlier this year after the US blocked the export of Boeing parts. He told reporters at the White House, “200 of their planes were unable to fly because we were not giving them Boeing parts purposely because they weren’t giving us magnets.”
Trump later said he released the parts. “I sent them all of the parts so their planes can fly. I could have held them back. I didn’t do that because of the relationship I have. And they’re flying.”
Warning of steep tariffs
The president repeated his threat to raise tariffs if China restricts shipments of rare-earth magnets. “They have to give us magnets, if they don’t give us magnets, then we have to charge them 200% tariffs or something,” he said.
Trump also argued that the US holds stronger cards than Beijing. “We have much bigger and better cards than they do. If I played those cards, that would destroy China. I’m not going to play those cards.”
China’s grip on magnets
Rare-earth magnets are vital in sectors from defence and electronics to renewable energy. China controls around 90% of global production and refining, giving it a dominant role in global supply. Earlier this year Beijing halted most shipments to the US in retaliation for American tariffs, only resuming them after a truce was struck in June.
Since then exports have surged. Data show US imports of Chinese magnets rose more than sevenfold in June, up 660% from the previous month, with further increases in July.
Trump acknowledged China’s strategy. “They intelligently identified rare earths as a critical component for important industries and swiftly moved to establish a monopoly in their mining and processing. We’re heavy into the world of magnets now, only from a national security standpoint.”
Beijing dismisses threats
Henry Wang, president of the Center for China & Globalization, a Beijing-based think tank, downplayed Trump’s remarks. “He always talks big on tariffs or potential punishment, but we shouldn’t get caught up in the rhetoric,” he told CNBC.
For Wang, the real test is whether both sides honour the commitments already agreed. “The true measure of progress will be both sides’ efforts to implement existing agreements,” he said.
A fragile truce at stake
The current arrangement between Washington and Beijing lowered tariffs to 55% for the US and 32% for China. It also eased controls on rare-earth exports and relaxed some American restrictions on Chinese technology firms. That deal runs out in mid-November.
Chinese negotiator Li Chenggang is expected in Washington this week for talks with US Trade Representative Jamieson Greer and senior Treasury officials. Analysts see the meetings as a chance to stabilise relations before a possible Trump-Xi encounter at the Asia-Pacific Economic Cooperation summit in South Korea in late October.
Feng Chucheng, founding partner of Hutong Research, said, “Without a long-term settlement with the United States, the business confidence cannot meaningfully recover in China.”
Trump links to wider trade disputes
Trump’s warning on magnets comes on the heels of his threat of 50% tariffs on Indian imports has come into effect. Trump cited New Delhi's purchase of Russian oil imports as the reason for the additional 25% tariffs. His treasury secretary Scott Bessent recently defended Washington’s decision not to penalise Beijing for similar transactions.
The president also pointed to tariffs as the ultimate tool. “If we want to put 100%, 200% tariffs on, we wouldn’t do any business with China. And you know, it would be OK too, if we had to. But the magnet situation, we have tremendous power over them, and they have some power over us. But I think it’s behind us.”
Trump hinted at progress in developing US capacity. “It will take us about a year to have the magnets,” he said, without giving details. MP Materials Corp., the only American rare earth miner, is preparing to begin commercial production later this year. Initial volumes will be limited, with Pentagon-backed expansion planned through the rest of the decade.
Trump later said he released the parts. “I sent them all of the parts so their planes can fly. I could have held them back. I didn’t do that because of the relationship I have. And they’re flying.”
Warning of steep tariffs
The president repeated his threat to raise tariffs if China restricts shipments of rare-earth magnets. “They have to give us magnets, if they don’t give us magnets, then we have to charge them 200% tariffs or something,” he said.
Trump also argued that the US holds stronger cards than Beijing. “We have much bigger and better cards than they do. If I played those cards, that would destroy China. I’m not going to play those cards.”
China’s grip on magnets
Rare-earth magnets are vital in sectors from defence and electronics to renewable energy. China controls around 90% of global production and refining, giving it a dominant role in global supply. Earlier this year Beijing halted most shipments to the US in retaliation for American tariffs, only resuming them after a truce was struck in June.
Since then exports have surged. Data show US imports of Chinese magnets rose more than sevenfold in June, up 660% from the previous month, with further increases in July.
Trump acknowledged China’s strategy. “They intelligently identified rare earths as a critical component for important industries and swiftly moved to establish a monopoly in their mining and processing. We’re heavy into the world of magnets now, only from a national security standpoint.”
Beijing dismisses threats
Henry Wang, president of the Center for China & Globalization, a Beijing-based think tank, downplayed Trump’s remarks. “He always talks big on tariffs or potential punishment, but we shouldn’t get caught up in the rhetoric,” he told CNBC.
For Wang, the real test is whether both sides honour the commitments already agreed. “The true measure of progress will be both sides’ efforts to implement existing agreements,” he said.
A fragile truce at stake
The current arrangement between Washington and Beijing lowered tariffs to 55% for the US and 32% for China. It also eased controls on rare-earth exports and relaxed some American restrictions on Chinese technology firms. That deal runs out in mid-November.
Chinese negotiator Li Chenggang is expected in Washington this week for talks with US Trade Representative Jamieson Greer and senior Treasury officials. Analysts see the meetings as a chance to stabilise relations before a possible Trump-Xi encounter at the Asia-Pacific Economic Cooperation summit in South Korea in late October.
Feng Chucheng, founding partner of Hutong Research, said, “Without a long-term settlement with the United States, the business confidence cannot meaningfully recover in China.”
Trump links to wider trade disputes
Trump’s warning on magnets comes on the heels of his threat of 50% tariffs on Indian imports has come into effect. Trump cited New Delhi's purchase of Russian oil imports as the reason for the additional 25% tariffs. His treasury secretary Scott Bessent recently defended Washington’s decision not to penalise Beijing for similar transactions.
The president also pointed to tariffs as the ultimate tool. “If we want to put 100%, 200% tariffs on, we wouldn’t do any business with China. And you know, it would be OK too, if we had to. But the magnet situation, we have tremendous power over them, and they have some power over us. But I think it’s behind us.”
Trump hinted at progress in developing US capacity. “It will take us about a year to have the magnets,” he said, without giving details. MP Materials Corp., the only American rare earth miner, is preparing to begin commercial production later this year. Initial volumes will be limited, with Pentagon-backed expansion planned through the rest of the decade.
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