^{US President Donald Trump during a meeting with Lee Jae Myung, South Korea’s president, not pictured, in the Oval Office of the White House in Washington, DC, US, on Monday, Aug. 25, 2025. |Al Drago | Bloomberg | Getty Images}

Trump’s Warning on Rare-Earths

President Donald Trump issued a fresh warning to China on Monday, threatening tariffs of up to 200% if Beijing limits exports of rare-earth magnets to the United States. Speaking after a White House meeting with South Korean President Lee Jae Myung, Trump said, “They have to give us magnets. If they don’t, then we have to charge them 200% tariffs or something.”

The remarks immediately raised concerns about the stability of the current U.S.-China trade truce, which has temporarily eased tariffs but remains set to expire in mid-November.

Airplane Parts as Bargaining Leverage

Trump also pointed to airplane components as a potential counterweight to Beijing’s rare-earth dominance. “Two hundred of their planes were unable to fly because we were not giving them Boeing parts purposely, because they weren’t giving us magnets,” he told reporters.

Boeing is currently in negotiations to sell up to 500 aircraft to China, a deal worth tens of billions of dollars. According to Bloomberg, discussions include delivery schedules and jet models, highlighting how aerospace sales could become a bargaining chip in broader trade negotiations.

China’s Grip on Rare-Earth Magnets

China controls roughly 90% of global rare-earth magnet production and refining capacity. These magnets are essential for a wide range of U.S. industries, from electric vehicles and smartphones to defense technologies and renewable energy systems.

After Beijing imposed export restrictions in April, shipments briefly slowed, but recent government data shows volumes have since rebounded. In June, Chinese magnet exports to the U.S. surged more than 660% from the prior month, before rising another 76% in July.

That rebound has eased short-term supply fears but underscored Washington’s vulnerability to China’s dominance in critical materials.

Analysts Question Trump’s Approach

Despite the tough rhetoric, some analysts doubt Trump’s threats will translate into real policy shifts. Henry Wang, president of the Beijing-based Center for China & Globalization, argued that Trump is “bluffing,” saying, “He always talks big on tariffs or punishment, but we shouldn’t get caught up in the rhetoric.”

Wang noted that both sides have shown signs of moving toward cooperation. In June, Washington and Beijing agreed on a framework to ease rare-earth export curbs and loosen certain American restrictions on technology shipments to China.

What’s at Stake in Upcoming Talks

Senior Chinese negotiator Li Chenggang is expected in Washington this week for talks with U.S. Trade Representative Jamieson Greer and Treasury officials. The meetings could set the stage for higher-level negotiations aimed at extending the trade truce beyond November.

Alfredo Montufar-Helu of advisory firm GreenPoint said the future of U.S.-China relations may hinge on whether both countries can convert temporary deals into more durable frameworks. “The next few weeks will determine whether this truce evolves into lasting solutions or unravels into another cycle of tariffs,” he noted.

Outlook

For now, U.S. and Chinese tariffs remain at 55% and 32% respectively, under the temporary framework agreed earlier this year. But Trump’s threat of a 200% tariff — particularly on a material as strategically vital as rare-earth magnets — signals that tensions could flare quickly if negotiations falter.

With global supply chains dependent on these critical inputs and multi-billion-dollar aircraft deals hanging in the balance, investors and industries worldwide will be closely watching the next phase of U.S.-China talks.

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