China Accuses U.S. of Creating “Panic” Over Rare Earth Controls, Signals Openness to Trade Talks

Trade Tensions Escalate Over Rare Earth Minerals

China has accused the United States of deliberately creating “unnecessary misunderstanding and panic” over Beijing’s controls on rare earth minerals, according to reports from Chinese state media. The accusation comes amid escalating trade tensions between the world’s two largest economies, with China indicating it remains open to negotiations to resolve the dispute.

Ministry of Commerce spokesperson He Yongqian stated during a press conference that “the US interpretation seriously distorts and exaggerates China’s measures,” according to the state newspaper Global Times. The comments represent Beijing’s first official response since announcing comprehensive controls on rare earth exports last week.

U.S. Officials Express Concerns Over Supply Chain Control

U.S. Trade Representative Jamieson Greer previously accused China of attempting to control global technology supply chains during a CNBC interview on Tuesday. Analysts suggest these rare earth elements are crucial for manufacturing everything from smartphones to military equipment, making them a strategic point of contention in ongoing trade discussions.

The timing of Beijing’s export controls announcement appears significant, coming ahead of an expected meeting between President Donald Trump and President Xi Jinping in Beijing later this month. According to the report from Global Times, Trump has threatened to impose 100% tariffs on Chinese goods starting November 1 or sooner in retaliation for China’s trade policies.

Industrial Policy Considerations in Trade Dispute

The dispute occurs against the backdrop of broader industrial policy considerations from both nations. Treasury Secretary Scott Bessent recently emphasized the need for vigilance in industrial policy matters, sources indicate. This perspective aligns with growing concerns about technological independence and supply chain security.

Meanwhile, the United States Secretary of the Treasury and other administration officials have been coordinating responses to what they characterize as China’s increasingly assertive trade posture. The current rare earth dispute echoes previous tensions that have periodically disrupted global technology manufacturing.

Broader Technology Industry Context

The rare earth confrontation occurs alongside significant developments across the technology sector. Industry reports indicate that companies like Qualcomm and MediaTek are exploring advanced chip manufacturing partnerships, while Nscale plans substantial GPU deployments to cloud infrastructure.

Additionally, TSMC’s CEO recently characterized Intel as both competitor and potential partner, reflecting the complex relationships within the semiconductor industry. These developments highlight how trade policies affecting rare earth materials could ripple through multiple technology sectors.

Potential Resolution Through Diplomatic Channels

Despite the escalating rhetoric, both nations appear to be keeping diplomatic channels open. Greer told CNBC that Trump wants to work with Beijing and remains scheduled to meet with Xi in South Korea later this month. Chinese spokesperson He similarly confirmed Beijing’s openness to talks with the U.S. during Thursday’s press conference.

The outcome of these potential discussions could significantly impact global trade dynamics, analysts suggest. With the threatened tariffs scheduled to take effect in early November, the window for diplomatic resolution appears to be narrowing, according to trade policy experts monitoring the situation.

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