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U.S. President Donald Trump on Friday threatened<\/a> to unleash new tariffs on China and cast doubt over a potential meeting between him and Chinese President Xi Jinping later this month in South Korea, further escalating a now monthslong trade spat between the two powers.\u00a0<\/p>\n Trump\u2019s threats came after China sharply expanded its export controls for rare earths, the powerful materials that underpin everything from semiconductors<\/a> and clean energy technologies to the U.S. defense industry. Beijing dominates the world\u2019s rare-earth supply chains, commanding about 85 percent of processing and 92 percent of magnet production. That has given it key leverage that it\u2019s harnessed in multiple rounds of negotiations after Trump first launched his trade war<\/a> in April.\u00a0<\/p>\n<\/p><\/div>\n U.S. President Donald Trump on Friday <\/span>threatened<\/span><\/a> to unleash new tariffs on China and cast doubt over a potential meeting between him and Chinese President Xi Jinping later this month in South Korea, further escalating a now monthslong trade spat between the two powers.\u00a0<\/span><\/p>\n Trump\u2019s threats came after China sharply expanded its export controls for rare earths, the powerful materials that underpin everything from <\/span>semiconductors<\/span><\/a> and clean energy technologies to the U.S. defense industry. Beijing dominates the world\u2019s rare-earth supply chains, commanding about 85 percent of processing and 92 percent of magnet production. That has given it key leverage that it\u2019s harnessed in multiple rounds of negotiations after Trump first <\/span>launched his trade war<\/span><\/a> in April.\u00a0<\/span><\/p>\n Under Beijing\u2019s new controls, which are set to take force on Dec. 1, foreign firms must <\/span>secure approval<\/span><\/a> from the Chinese government to export magnets and certain semiconductor materials that include at least <\/span>0.1 percent<\/span><\/a> Chinese rare earth content<\/span>. The moves will \u201csafeguard national security and interests,\u201d the Chinese Ministry of Commerce said in its <\/span>announcement<\/span><\/a>. <\/span><\/p>\n In particular, export licenses with <\/span>military purposes<\/span><\/a> are not likely to receive approval, according to the <\/span>ministry<\/span><\/a>. The ministry will approve export applications involving artificial intelligence and semiconductors on a <\/span>case-by-case basis<\/span><\/a>. In a<\/span> separate announcement<\/span><\/a>, Beijing also unveiled fresh export controls targeting the battery supply chain, which are set to begin on <\/span>Nov. 8<\/span><\/a>.\u00a0<\/span><\/p>\n The moves, if implemented fully, amount to a dramatic escalation of a trade spat between the world\u2019s two biggest economies, industry experts said.\u00a0<\/span><\/p>\n \u201cThese are the most stringent export restrictions on rare earths that China has imposed,\u201d said Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies. \u201cThese magnets are crucial for our defense technologies, and by making it near impossible for defense companies and the military to access them, it cripples our industrial base,\u201d Baskaran said.\u00a0<\/span><\/p>\n The series of moves was certain to ratchet up the pressure between Beijing and Washington ahead of expected upcoming talks between Xi and Trump in South Korea at the Asia-Pacific Economic Cooperation forum, which starts on Oct. 31. But after Beijing\u2019s latest measures were announced, Trump said in a <\/span>post on Truth Social<\/span><\/a> that \u201cnow there seems to be no reason\u201d to meet his Chinese counterpart. \u201cThere is no way that China should be allowed to hold the World \u2018captive,\u2019 but that seems to have been their plan for quite some time,\u201d he declared.\u00a0<\/span><\/p>\n In his post, Trump added that Beijing had sent letters to other countries announcing its new curbs. \u201cDependent on what China says about the hostile \u2018order\u2019 that they have just put out, I will be forced, as President of the United States of America, to financially counter their move,\u201d he said.<\/span><\/p>\n That could include steeper tariffs, he said. \u201cOne of the Policies that we are calculating at this moment is a massive increase of Tariffs on Chinese products coming into the United States of America,\u201d Trump wrote. \u201cThere are many other countermeasures that are, likewise, under serious consideration.\u201d<\/span><\/p>\n Chris McGuire, who formerly served at the National Security Council and U.S. Department of State under the Biden and Trump administrations, said that Washington has significant levers that it could pull, particularly with regard to semiconductor chip supply chains.\u00a0<\/span>While the United States has previously imposed narrowly targeted controls on select semiconductors, he said, Washington has the power to go even further. <\/span><\/p>\n \u201cIf the Chinese are going to try to threaten to shut down our entire semiconductor ecosystem with rare-earth controls\u2014if they\u2019re actually intent on doing that\u2014then they should be aware that we have the ability to extend this into a much broader swath of their commercial ecosystem as well,\u201d he said.\u00a0<\/span><\/p>\n Some lawmakers have pushed for other forms of pressure. In January, Republican Rep. John Moolenaar, the chairman of the House select committee on China, and Democratic Rep. Tom Suozzi <\/span>introduced legislation<\/span><\/a> aimed at revoking China\u2019s permanent normal trade relations status. (Republican Sens. Tom Cotton and Jim Banks introduced companion legislation in the Senate.) <\/span>In September, Moolenaar also <\/span>urged<\/span><\/a> the Trump administration to launch a coordinated effort with U.S. allies to jointly squeeze Beijing by targeting China\u2019s commercial aviation landing rights, commercial aerospace parts and services, and outbound investment.<\/span><\/p>\n In response to China\u2019s latest announcement, Moolenaar reiterated those calls in a <\/span>statement<\/span><\/a> on Thursday. <\/span>\u201cChina has fired a loaded gun at the American economy,\u201d he said.<\/span><\/p>\n<\/p><\/div>\n This post is part of FP\u2019s ongoing coverage of the Trump administration<\/i>. <\/i>Follow along here<\/a>.<\/em><\/p>\n<\/p><\/div>\n<\/p><\/div>\n