Xinhua reported that on October 12, China's Ministry of Commerce defended the decision to tighten exports of rare earth and related products, affirming that this is a legal action of the government to perfect the export control system according to the law, and called on the US to handle differences appropriately through dialogue, in the spirit of mutual respect and equal consultation.
In the context of a volatile world with increasing military conflict and fierce technological competition, China has seen rare and heavy Earth elements increasingly used in the defense sector, said a spokesperson for the Chinese Ministry of Commerce.
As a responsible major country, China applies export control to these goods to protect world peace, stabilize the region and fulfill international obligations on the non-dissolving of weapons, the spokesperson emphasized.
China insists the new measures do not mean an export ban. Eligible businesses can still be licensed. Before announcing the measure, China had notified partners through bilateral dialogue mechanisms on export control.
We are ready to increase exchanges and dialogues with other countries to jointly protect the security and stability of the global supply chain, the Chinese Ministry of Commerce said.
According to the Chinese Ministry of Commerce, the government has carefully assessed the potential impact of the decision on the industry and supply chain and concluded that the impact will be very limited. In the coming time, Beijing will continue to consider licensing according to regulations, and consider applying facilitation mechanisms such as general licenses or license exemptions to facilitate legal trade activities.
"Exports for civil purposes, in accordance with regulations, will be approved. Businesses do not need to worry, the spokesperson added, affirming that China will cooperate with other countries to maintain global peace and stability.
Just a day after China's Ministry of Commerce's announcement on October 9 on controlling rare earth exports, US President Donald Trump said that a new 100% tax will be imposed on Chinese goods, expected to take effect from November 1 or sooner depending on any further action or changes by China. President Trump also stressed the need to impose export control measures on key software in retaliation for China's measures against rare earth minerals.
With the above moves, the global chip supply chain is at risk of disruption. Rare measures to limit land exports may delay the delivery of ASML Holding NV - the world's only manufacturer of the most advanced semiconductor chip manufacturing machines - for many weeks. The most obvious risk companies are facing right now is the strong upward trend of rare earth-based magnetes - which play a key role in the chip supply chain.
This is not the first time rare earths have become the focus of US-China trade tensions. After President Trump increased import tariffs on Chinese goods earlier this year, the Beijing government responded by stopping mineral exports to US businesses. After that, the two sides reached a "war" agreement in the spring, Mr. Trump lowered the applicable tax rate, while the Chinese side agreed to resume the supply of rare earth materials.
