'Repudiation of Geneva deal': US warns it is 'prepared to take strong actions' over China's rare earth export curbs

The move has triggered alarm in Washington, where Treasury Secretary Scott Bessent said the United States is coordinating a global response (Image: X/@USTradeRep)

The United States has sharply criticized China’s newly announced rules tightening control over rare earth mineral exports, calling them a violation of a bilateral economic understanding reached just six months ago in Geneva. In a strongly worded statement, U.S. officials accused Beijing of ignoring commitments to ease trade tensions and warned of potential retaliatory measures.

“China’s expansive rule to control the flow of rare earths is a repudiation of the U.S.-China agreement reached 6 months ago in Geneva. The Administration is prepared to take strong actions if China moves forward with this escalatory new regime,” a U.S. statement said.

The warning comes after Beijing introduced additional export restrictions on rare earth minerals, citing national security concerns and alleging foreign firms were using Chinese supplies for military purposes. China dominates the rare earths industry, accounting for about 70 per cent of global mining output and nearly 90 per cent of processing capacity. The minerals are critical for manufacturing high-technology products, ranging from smartphones and electric vehicles to wind turbines and defence systems.

The move has triggered alarm in Washington, where Treasury Secretary Scott Bessent said the United States is coordinating a global response. “We’re going to be speaking with our European allies, with Australia, with Canada, with India and the Asian democracies,” Bessent told CNBC on Wednesday. “And we’re going to have a fulsome group response to this because bureaucrats in China cannot manage the supply chain or the manufacturing process for the rest of the world.”

Beijing’s decision has also drawn a sharp political response, including from U.S. President Donald Trump, who warned of imposing 100 per cent tariffs on Chinese goods if Beijing does not reverse course.

The rare earth dispute threatens to unravel the fragile economic truce reached in Geneva on May 12, 2025. In that joint statement, the United States and China agreed to temporarily suspend some tariff increases and resume dialogue on trade relations. The agreement established a mechanism for continued discussions led by Vice Premier He Lifeng for China and Treasury Secretary Bessent and U.S. Trade Representative Jamieson Greer for the United States.

Bessent said Washington has already begun consultations with allies. “This is China versus the world,” he told Fox Business. “They have pointed a bazooka at the supply chains and the industrial base of the entire free world.”

China’s rare earth exports are especially vital to the United States, the European Union and India, which rely heavily on Chinese supplies for strategic industries.

With inputs from PTI