China has accused the United States of deliberately exaggerating its new restrictions on rare earth mineral exports, claiming the actions are creating unnecessary global panic.
The Ministry of Commerce spokesperson, He Yongqian, stated that the U.S. interpretation "seriously distorts and exaggerates China’s measures, deliberately creating unnecessary misunderstanding and panic."
Beijing announced the sweeping controls last week, requiring export licenses for rare earths to safeguard national security and prevent misuse in military applications such as weapons of mass destruction.
These minerals are essential components in magnets used for U.S. weapons platforms including the F-35 warplane, Tomahawk cruise missiles, and Predator drones, as well as civilian technologies like electric vehicles and semiconductors.
The measures come ahead of a planned meeting between President Donald Trump and President Xi Jinping in South Korea later this month, a fixture that has helped stabilize markets following earlier tariff truces.
U.S. officials have sharply criticized the restrictions, with Trade Representative Jamieson Greer describing them as "a global supply-chain power grab."
Greer indicated that Beijing's implementation could trigger Trump's threatened 100 percent tariffs on Chinese goods, set to begin November 1 or sooner, though the administration remains open to talks.
Treasury Secretary Scott Bessent accused China of using its dominance in rare earth refining to slash prices and undermine competitors, calling for U.S. industrial policies like equity stakes in domestic firms.
Bessent also made personal remarks about China's chief trade negotiator, Li Chenggang, labeling him "slightly unhinged" and alleging threats of global chaos over proposed U.S. port fees.
He Yongqian rejected these comments as "grossly distorted," asserting that China is "taking the initiative to negotiate and communicate with the United States."
Beijing countered by highlighting U.S. restrictions on semiconductors and its expansive export control list of over 3,000 items, compared to China's 900, arguing its measures align with international practices in place since the 1950s.
Despite the heated rhetoric, both sides have expressed willingness to engage.
He emphasized that compliant license applications for civilian uses would be approved, clarifying that the controls do not require global manufacturers to seek permission for products with trace amounts of Chinese rare earths.
The U.S. has advanced domestic efforts, including a July Department of Defense deal with MP Materials, the largest U.S. rare earth miner, featuring an equity stake, price floor, and offtake agreement.
Bessent suggested potential extensions to the current 90-day tariff truce, expiring around November 9, and additional equity investments to achieve self-sufficiency with allies.
China maintains it notified Washington prior to the announcement and attributes the U.S. escalation to its own expansion of the Entity List targeting Chinese firms evading high-tech export curbs.
As the superpowers navigate these frictions, the upcoming Trump-Xi summit offers a critical opportunity to de-escalate and preserve recent gains from dialogues, including a September 19 call and the Madrid summit's TikTok breakthrough.C