Trump says China has 'totally violated' Geneva deal with US on tariffs, minerals

CNA

2 days ago

WASHINGTON: US President Donald Trump said on Friday (May 30) that China had violated an agreement with the US to mutually roll back tariffs and trade restrictions for critical minerals and issued a new veiled threat to get tougher with Beijing.
"China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!" Trump said in a post on his Truth Social platform.
Trump said that he made a "fast deal" in mid-May with Chinese officials for both countries to back away from triple-digit tariffs for 90 days. He said he did this to save China from a "devastating" situation, factory closings and civil unrest caused by his tariffs of up to 145 per cent on Chinese imports.
Trump did not specify how China had violated the agreement made in Geneva, Switzerland, or what action he would take against Beijing.
Asked later on Friday in the Oval Office about the China deal, Trump said: "I'm sure that I'll speak to President Xi, and hopefully we'll work that out."
RARE EARTHS LICENSES
But a US official told Reuters said it appears China was moving slowly on promises to issue export licenses for rare earth minerals.
The deal called for China to lift trade countermeasures that restrict its exports of the critical metals needed for US semiconductor, electronics and defence production.
"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 specifying how that would happen.
Reuters reported on Friday that global auto executives are sounding the alarm on an impending shortage of rare-earths 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."
Reuters reported earlier this week that the US has ordered a broad swath of companies to stop shipping goods to China without a license and revoked some existing export licenses, according to three people familiar with the matter.
Products affected include design software and chemicals for semiconductors, butane and ethane, machine tools, and aviation equipment, these sources said.
A US official with knowledge of the talks told Reuters that only tariffs and Chinese non-tariff countermeasures were covered in Geneva, and that US export controls were not part of the deal.
Spokespersons for the White House, the US Treasury and the US Trade Representative's Office did not respond to requests for comment.
CHINA TALKS "STALLED"
On Thursday, Treasury Secretary Scott Bessent told Fox News Channel that US trade talks with China were "a bit stalled" and getting a deal over the finish line will likely need the direct involvement of Trump and Chinese President Xi Jinping.
The US-China agreement 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 per cent in early April.
It was less than 3 per cent 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, leaving those issues for future talks.
Major US stock indexes fell on Friday after Trump's complaint about China's compliance.
Trump's social media post comes two days after a reporter infuriated him by asking for his reaction to Wall Street's new term for bets that he will back off from extreme tariff actions, the "TACO" trade, an acronym coined by a Financial Times columnist for "Trump Always Chickens Out".
Trump responded by saying it was "the nastiest question".
"I chicken out? Oh, I've never heard that. You mean because I reduced China from 145 per cent that I set, down to 100 and then to another number?" Trump said, later adding: "It's called negotiation."
Trump's tariff strategy also suffered a major setback on Wednesday when the US Court of International Trade ruled that his broad global tariffs, including those on China, were invalid because he exceeded his authority under an emergency powers law used to back them.
An appeals court has issued a temporary stay for the decision, allowing them to remain in place for now.
JAPAN TALKS
Japan's top trade negotiator, Ryosei Akazawa, met with Bessent and Commerce Secretary Howard Lutnick in Washington for 130 minutes on Friday, the Japanese government said in a statement.
It added that the two sides would continue to talk ahead of the G7 leaders' summit in Canada next month where Trump and Japan's Prime Minister Shigeru Ishiba are set to meet in person.
In a later briefing to reporters, Akazawa said that while progress had been made in talks with the US, it was Japan's unchanged position that any deal would require the US to drop all the tariffs, including those applied to automobiles, auto parts, aluminium and steel.
"If our requests to do that are met, we may be able to come to an agreement," Akazawa told Japanese media gathered at the Japanese embassy in Washington.