President Donald Trump has issued a strong warning, indicating he may pull out of an anticipated meeting with Chinese President Xi Jinping. This comes after China implemented new regulations on its rare earth exports.
In a social media announcement, Trump stated he sees “no reason” to meet with President Xi this month, citing China’s increasingly “hostile” stance and its attempts to control global markets. He also signaled a significant increase in tariffs on Chinese goods, heightening concerns about a worsening trade dispute between the two global economic powers.
These statements caused a noticeable dip in financial markets, with the S&P 500 experiencing a decline in mid-afternoon New York trading.
China holds a dominant position in the global supply of rare earth minerals, which are crucial for manufacturing a wide range of products, including automobiles and smartphones. Previous instances of China tightening export controls have led to significant disruptions for businesses, including temporary production halts for companies like Ford.
Beyond the rare earth export rules, China has also initiated a monopoly investigation into the US technology firm Qualcomm, which could impact its planned acquisition of another chip manufacturer. While Qualcomm is US-based, a substantial part of its operations are centered in China.
Additionally, Beijing has announced new port fees for vessels associated with the US, including those owned or operated by American companies.
Trump expressed his concerns on social media, writing, “Some very strange things are happening in China! They are becoming very hostile.”
The US and China have been navigating a delicate trade truce since May, when both countries agreed to lift substantial tariffs that had previously hampered trade between them. Since then, officials have engaged in discussions on various issues, including TikTok, agricultural imports, and the trade of critical materials like rare earths and advanced technologies such as semiconductors.
A summit between the US and Chinese leaders was anticipated in South Korea this month. However, experts suggest that while the meeting’s immediate future is uncertain, diplomatic channels remain open, especially since China’s new regulations are not set to take effect until December. Negotiations are expected to resume soon, with the specifics of these discussions likely to be determined in the coming weeks.