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China accuses U.S. of breaking trade truce, threatens retaliation over rare earths dispute

Beijing warns of “resolute measures” after Washington tightens tech curbs and export tensions resurface.

   
June 2, 2025, 06:45
Business & Energy
China accuses U.S. of breaking trade truce, threatens retaliation over rare earths dispute

BEIJING (Realist English). China has accused the United States of “seriously violating” a recently agreed trade truce, warning of retaliatory action as bilateral tensions reignite over export controls and rare earth shipments.

In a sharply worded statement released Monday, China’s Ministry of Commerce said that Washington had introduced “a series of discriminatory and restrictive measures” since the May 12 agreement in Geneva, undermining what Beijing described as a consensus to ease tariff pressures between the world’s two largest economies.

“If the U.S. insists on going its own way and continues to harm China’s interests, China will take strong and resolute measures to safeguard its legitimate rights,” the ministry declared.

The warning follows comments by President Donald Trump, who on Friday accused Beijing of “totally violating” the trade deal. U.S. officials have expressed mounting frustration over what they describe as China’s sluggish pace in lifting restrictions on rare earth exports — a key expectation from the Geneva truce.

Since early April, China has imposed new controls on rare earth minerals critical to the U.S. defense, electronics, and automotive sectors. The May agreement was expected to restore access for U.S. manufacturers, but Chinese authorities have only approved limited shipments in recent weeks, raising concerns over potential supply chain disruptions.

The Chinese ministry also criticized several recent U.S. actions: global warnings against Huawei chips, a ban on sales of chip design software to Chinese firms, and the revocation of visas for Chinese students. Beijing described these as “unilateral provocations” that breached the spirit of cooperation.

“The U.S. has created new frictions rather than reflecting on its own actions,” the statement said.

Trump, for his part, said he hopes to hold a direct phone call with President Xi Jinping to resolve the standoff — a proposal he has raised multiple times, but which has yet to materialize.

The Geneva agreement was a fragile pause in a longer trade conflict. With strategic sectors like semiconductors and rare earths now at the center, the U.S.-China rivalry is shifting from tariffs to technological containment. Whether diplomacy can restore stability remains uncertain — but both sides appear increasingly willing to escalate.

ChinaChina’s Foreign PolicyUnited StatesUS Foreign PolicyUS-China Relations
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