President Donald Trump has threatened to impose a 200 percent tariff "or something" on China if it fails to supply the United States with magnets, though he said he believed "we’re not going to have a problem."
"They have to give us magnets. If they don’t give us magnets … we have to charge them a 200% tariff or something," Trump told reporters on Monday as he hosted South Korean President Lee Jae Myung at the White House.
"But we’re not going to have a problem," he added.
Trump accused Beijing of securing a monopoly over the global magnet industry. "China, intelligently went and they took a monopoly of the world’s magnets," he said.
"Nobody needed magnets until they convinced everybody 20 years ago, 'let’s all do magnets.'"
The president said the US could be self-sufficient in magnet production within a year.
"With magnets, we’re going to have a lot of magnets in a pretty short period of time. In fact, we’ll have so many we won’t know what to do with them," he noted.
Tariffs as leverage
Trump pointed to Washington’s decision to block the export of Boeing aircraft parts to China, claiming that 200 Chinese planes were "unable to fly" because Beijing withheld magnets.
"I could have held them back. I didn’t do that because of the relationship I have. And they’re flying. Their planes are now flying," Trump said.
"Therefore, we weren’t given (magnets), but we have a much more powerful thing: That’s tariffs. If we want to put 100 percent, 200 percent tariffs on, we wouldn’t do any business with China."
He stressed that while China holds "some" power, Washington has "bigger and better cards."
Trump added, "I think we have a great relationship … At some point, probably during this year or shortly thereafter, we’ll go to China, and I think we’re going to see a magnificent sight. It’s a great country."
Beijing’s restrictions
In April, China imposed restrictions on exports of rare earth magnets used in wind turbines, electric cars, and MRI scanners, requiring companies to obtain licenses.
The move was widely viewed as retaliation for US tariffs on Chinese goods.
Some restrictions were later eased under a preliminary agreement.
China continues to dominate the market, producing more than 90% of the world’s rare earth magnets.
The US has sought to cut its dependency, with Apple and MP Materials announcing in July a $500 million investment in a facility to recycle rare earth magnets and bolster domestic supply.
