Trump Threatens China With 200 Percent Tariffs Over Magnets

Donald Trump threatened China with tariffs of up to 200 percent unless the country ensures the supply of rare earth magnets to the United States. This escalation follows a period of trade volatility characterized by momentary U.S. tariffs of 145 percent and Chinese retaliatory rates of 125 percent.

A truce reached in Stockholm and later confirmed in London reduced headline tariff rates to 30 percent for the U.S. and 10 percent for China, deferring a final trade agreement until early November. To reduce dependence on China, which controls over 90 percent of rare earth processing, the U.S. Department of Defense is funding a Lynas Rare Earths Ltd. facility in Texas and providing a $1 billion debt facility to MP Materials Corp.

In exchange for easing China's leverage over rare earths, the Trump administration lifted bans on certain modified Nvidia Corp. H20 chips. As part of this arrangement, the U.S. requested a 15 percent share of the company's Chinese sales.