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President Donald Trump has accused China of breaching an agreement with the United States aimed at mutually reducing tariffs and trade barriers on critical minerals, while also issuing a fresh warning of potentially increasing pressure on Beijing.
“China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!,” Trump stated in a Truth Social post on Friday.
Trump mentioned that he negotiated a “quick deal” with Chinese officials in mid-May which involved both nations pausing triple-digit tariffs for a 90-day period. He indicated this was to assist China in avoiding a “devastating” outcome, factory shutdowns, and social unrest linked to his tariffs reaching 145% on Chinese imports.
Trump did not elaborate on how China had breached the Geneva-based agreement, nor did he specify the actions he might consider against Beijing.
When questioned on Friday in the Oval Office regarding the China deal, Trump commented: “I’m sure that I’ll speak to President Xi, and hopefully we’ll work that out.”
However, a US official informed Reuters that China seems to be dragging its feet on commitments to issue export licenses for rare earth minerals. The agreement required China to remove trade barriers impeding imports of these critical metals essential for US semiconductor, electronics, and defense manufacturing.
“The Chinese are slow-rolling their compliance, which is completely unacceptable, and it has to be addressed,” US Trade Representative Jamieson Greer told CNBC, without detailing specific measures.
On Friday, global auto executives began sounding the alarm on an impending shortage of rare-earth magnets from China, used in everything from windshield-wiper motors to anti-lock braking sensors, that could force the closure of car factories within weeks.
Liu Pengyu, a spokesperson for China’s embassy in Washington, said China has maintained communications on trade matters with US counterparts since the Geneva talks, but raised concerns about US export controls.
“Recently, China has repeatedly raised concerns with the US regarding its abuse of export control measures in the semiconductor sector and other related practices,” Liu said in a statement.
“China once again urges the US to immediately correct its erroneous actions, cease discriminatory restrictions against China, and jointly uphold the consensus reached at the high-level talks in Geneva.”
The US has also increased directives to companies to cease shipments to China without a license, and has revoked some current export licenses, as reported by three individuals familiar with the situation to the Reuters news agency.
Trade talks ‘stalled’
On Thursday, Treasury Secretary Scott Bessent told Fox News that trade talks with China were “a bit stalled” and that getting a deal over the finish line will likely require the direct involvement of Trump and Chinese President Xi Jinping.
The US-China temporary truce to dial back triple-digit tariffs for 90 days prompted a massive relief rally in global stocks, and along with other pauses on Trump’s import taxes, has lowered the effective US tariff rate to the mid-teens from around 25% in early April.
It was less than 3% when Trump took office in January.
The temporary truce between Washington and Beijing, however, had done nothing to address the underlying reasons for Trump’s tariffs on Chinese goods, mainly longstanding US complaints about China’s state-dominated, export-driven economic model.
Major US stock indexes ended little changed on Friday after Trump complained about China’s compliance.
