Highlights

• President Trump threatens 200% tariffs on China over rare earth magnets while China controls 90% of the global market.
• Despite economic pressure, the US maintains an open policy for Chinese students, with 600,000 currently studying in America.
• The US seeks to reduce dependency on Chinese critical materials while preserving diplomatic and educational channels.

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Is Washington pressuring Beijing on critical materials while keeping doors open for Chinese students?

In a press conference alongside South Korean President Lee Jae Myung at the White House, United States President Donald Trump once again put Beijing on notice, warning that China must ensure a steady supply of rare earth magnets to the US or face sweeping new tariffs. In an article (opens in a new tab) published on August 26, 2025, the South China Morning Post reported that Trump said China would have to “give us magnets” or else Washington would impose tariffs of up to 200 percent, a level he conceded would essentially halt bilateral trade.

Despite the stark threat, Trump also signaled that he does not intend to play his strongest hand against Beijing yet. “We have incredible cards, but I don’t want to play those cards. If I played those cards, that would destroy China,” he said, declining to elaborate further. His remarks marked a shift from his more conciliatory tone earlier this month, when he extended a 90-day pause on tariff increases to give negotiators additional time to work toward a trade compromise.

Rare earth magnets at the center of dispute

Al Jazeera, reporting (opens in a new tab) on August 25, noted that Trump’s comments landed in the middle of an already tense trade standoff between the world’s two largest economies. China holds an overwhelming dominance in the rare earth magnet sector, controlling roughly 90 percent of the global market. These magnets are indispensable for a wide range of modern technologies, including smartphones, electric vehicles, and semiconductor chips.

Beijing has grown more protective of its rare earth resources in recent months, adding several items to its export restriction list in April in retaliation for earlier US tariff hikes. At the same time, Chinese exports of rare earth minerals have been rising. Data from China’s General Administration of Customs showed that July shipments increased by more than 4,700 tonnes compared to June, underscoring how sensitive both sides are to supply flows in this strategically critical industry.

The United States has been moving to insulate its economy from Chinese leverage in this area. Al Jazeera reported that Washington recently took a 10 percent stake in Intel, one of the world’s largest semiconductor producers. Semiconductors rely heavily on rare earth materials, making a reliable magnet supply chain a key priority for the White House.

A truce under strain

For now, Washington and Beijing are officially observing a trade truce, which was first reached in May. Under that arrangement, the US scaled tariffs on Chinese goods back to 30 percent, while China gained breathing space on access to American advanced technologies such as AI chips. Earlier this month, Trump signed an executive order extending the tariff pause for 90 days, staving off an automatic increase to 145 percent. His latest threat to impose 200 percent duties raises questions about whether that truce will hold.

The South China Morning Post noted that while Trump has targeted other nations—including India and Brazil—with punitive tariffs, his administration has taken a softer line with China in recent months. Monday’s remarks, however, appeared to remind Beijing that Washington still considers tariffs one of its most powerful negotiating tools.

Keeping channels open for students

Amid the economic brinkmanship, Trump struck a more conciliatory note on another issue: Chinese students in the US. He dismissed speculation that his administration might block student visas, saying it was important to continue welcoming them. “We’re going to allow their students to come in. It’s very important, 600,000 students,” he said. Chinese students represent the largest foreign student group in America and contribute billions of dollars annually to universities and local economies.

Trump also confirmed his intention to visit China in the near future, telling reporters he had spoken with President Xi Jinping “fairly recently.” While no date has been set, he suggested the trip could take place later this year or soon after.

Outlook for US-China relations

The president’s mix of combative economic threats and reassurances of cultural and educational exchange reflects the dual-track nature of US-China relations in 2025. On one hand, Washington is determined to reduce reliance on Beijing for materials that are critical to national security and technological development. On the other hand, the White House appears eager to keep some channels of cooperation open, whether in student exchanges or high-level diplomacy.

Whether Trump’s 200 percent tariff threat is a negotiating tactic or a genuine policy move remains unclear. What is certain is that rare earth magnets—a niche industrial product invisible to most consumers—have become a central flashpoint in a much larger struggle for economic leverage and technological dominance between the United States and China.

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