China defends rare earth export curbs as ‘legitimate’

China recently defended its new export controls on rare earths, stating that it is a “legitimate” measure under international law. This move comes in response to U.S. accusations of economic coercion following Washington’s announcement of retaliatory tariffs and export restrictions.

The Chinese Ministry of Commerce emphasized that the controls, implemented on Oct. 9, are aimed at enhancing Beijing’s export control system to promote world peace and regional stability amidst a challenging global security landscape.

The measures extend beyond rare earth materials to include related intellectual property and technologies. This announcement came just before a potential meeting between U.S. President Donald Trump and Chinese leader Xi Jinping.

The Chinese commerce ministry clarified that these controls do not amount to export bans, and applications meeting the criteria will be approved. It also assured that the impact on the supply chain would be minimal.

Additionally, Beijing’s new restrictions necessitate foreign entities to obtain a license for exporting products containing domestically-sourced rare earths above a certain threshold. Applications for items with military applications will be denied.

Following Beijing’s tightening of export controls, the European Chamber of Commerce in China reported delays in export license approvals, complicating the global supply chain of rare earth elements.

In response to China’s actions, President Trump announced new tariffs of 100% on Chinese imports starting Nov. 1, along with export controls on critical software. This move led to a significant drop in stock markets, wiping out $2 trillion in market value.

China responded by criticizing the U.S. for having a longer control list compared to China’s. With China accounting for about 70% of global rare earth supply, it has used these minerals as leverage in trade negotiations.

Shortly after imposing export controls on rare earths, China announced charges on U.S. ships docking at Chinese ports, mirroring a U.S. fee on Chinese vessels. This tit-for-tat move, described as “necessary passive defensive actions” by China, strained the economic and trade talks atmosphere between the two countries.

Trade negotiations between U.S. and Chinese officials have shown some progress in recent months, with discussions on issues like TikTok ownership. However, Trump’s recent threat to cancel a meeting with Xi following China’s export curbs highlights the ongoing tensions between the two nations.

— This article is a unique adaptation of the original content, with contributions from CNBC’s Anniek Bao and Evelyn Cheng.