US President Donald Trump says ‘there seems to be no reason’ to meet Chinese President Xi Jinping
US President Donald Trump’s threats to increase tariffs on Chinese exports and cancel the meeting with President Xi Jinping sent markets and relations between the world’s largest economies into a spiral.
Mr Trump, who will meet Xi in South Korea in about three weeks, complained on social media about what he described as China’s plans to hold the global economy hostage after China significantly expanded rare earth element export controls on Thursday.
China dominates the market in such elements required for technology production.
Mr. Trump said there was no need to hold the meeting with Xi that he had previously announced.
Chinese officials never confirmed the meeting between the leaders.
The remarks signaled the biggest rupture in relations in four months and raised questions about whether the thaw between the US economies and China, the world’s largest factory and largest consumer, could continue.
Mr. Trump, a Republican who uses tariffs paid by U.S. importers against friends and foes, said on Friday he was weighing a “tremendous” increase in such duties on Chinese-made goods.
Such a move could revive a destabilizing tit-for-tat trade war that the United States and China paused earlier this year for painstaking diplomacy.
China has long called on the United States to abandon unilateral trade restrictions that it says undermine global trade.
Unexpected developments shook global financial markets and caused the benchmark S&P 500 Index to lose 2 percent of its value; That marked its biggest one-day decline since April, when Mr. Trump’s incessant tariff announcements were a central feature of market volatility.
Investors fled to the safe haven of gold and US Treasuries, and the US dollar weakened against a range of foreign currencies.
Craig Singleton, China expert from the Foundation for Defense of Democracies, said that he sees the US’s export control steps as a betrayal and said, “Trump’s post may be the beginning of the end of the customs ceasefire.”
“Beijing seems to have overplayed its hand.”
In his post, Mr. Trump said China had sent letters to countries around the world stating that it planned to impose export controls on every element of production related to rare earths.
He said that he was contacted by unnamed countries angry with China’s steps and that he was surprised due to the recent “very good” relations with the country.
“Depending on what China has to say about the hostile ‘order’ they just laid out, as President of the United States, I will have to financially oppose their move,” Mr. Trump told Truth Social.
“For every Element they can monopolize, we have two.”
He added: “I was due to meet President Xi at APEC in South Korea in two weeks, but there seems to be no reason to do so now.”
Mr Trump had previously said he would meet Xi on the sidelines of the Asia-Pacific Economic Cooperation forum in Gyeongju, South Korea, which begins on October 31.
Economic tensions have been increasing in recent days.
For example, on Thursday, the US administration proposed banning Chinese airlines from flying via Russia on routes to and from the US.
Major U.S. online retail sites have removed millions of listings for banned Chinese electronics, the Federal Communications Commission said Friday.
China’s move on Thursday included the addition of five new items to its export-restricting control list, as well as dozens of refining technologies.
Foreign companies will need to obtain special approval to transport metal elements to the ship.
Chinese officials also clarified permit requirements for the export of technologies used in rare earth mining, smelting and recycling, adding that any export requests for products used in military goods will be rejected.
China produces more than 90 percent of the world’s processed rare earth elements and rare earth magnets.
Many of them are vital materials in products ranging from electric vehicles to aircraft engines to military radars.
via Reuters
