G7 set to discuss joint response to China curbs on rare earths
The latest spat between the world’s two largest economies has rattled markets in recent days
[WASHINGTON] Finance chiefs from the Group of Seven (G7) industrial nations will consider a joint response to discourage China’s planned move to control the global supply of rare earths, officials said on Wednesday (Oct 15).
Germany Finance Minister Lars Klingbeil told reporters that the G7 gathering later today will include a discussion of a common approach to address China’s actions with targeted measures, while cautioning against taking any steps that backfire on their economies.
Treasury Secretary Scott Bessent indicated the US would seek wider support beyond the G7, which also includes Canada, Japan, France, Italy and the UK, noting that finance ministers from around the world are visiting the US capital for the annual meetings of the International Monetary Fund and World Bank this week.
“We are going to be speaking with our European allies, with Australia, with Canada, with India and the Asian democracies,” Bessent said at a CNBC-hosted forum in Washington. “We are 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.”
China’s new rules, announced last week, require overseas firms to obtain Chinese government approval before exporting products containing even trace amounts of certain rare earths that originated in China.
That came as a surprise to US officials who thought they had agreed, as part of a tariff truce negotiated over several rounds, that China’s critical minerals should be allowed to flow to companies globally with minimal restrictions.
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The Treasury chief also said that as far as he’s aware, US President Donald Trump “is a go” on meeting President Xi Jinping later this month in South Korea. Bessent said there’s a “very good chance” that he heads out to Asia before Trump and meets with his Chinese counterpart, Vice-Premier He Lifeng.
The latest spat between the world’s two largest economies has rattled markets in recent days. US stocks only partly recovered this week from a plunge on Friday after Trump threatened massive tariffs on Chinese goods in response to China’s rare-earth curbs.
Bessent also said the tariff truce could be extended if China postpones its rare earth restrictions. Since earlier this year, the US and China have agreed to 90-day truces on import duties of as high as 145 per cent, with the next deadline looming in November.
Asia trip
Bessent said that he expected trade announcements being made during Trump’s Asia tour. The president is expected to attend a summit with the Association of South-east Asian Nations in Malaysia before going on to Japan and South Korea, which will be hosting the annual Asia-Pacific Economic Cooperation leaders meeting.
The US is “about to finish up” negotiations with South Korea, Bessent added. Those talks have lately revolved around the contours of a giant investment programme. US-Canada talks are “back on track”, Bessent also said. He also indicated progress with India.
Bessent dismissed the notion that a slide in the stock market would force the Trump administration into a negotiating position with Beijing, saying that what spurs such talks is instead the economic interest of the nation. The US won’t negotiate with China “because the stock market is going down,” he said.
G7 countries are collaborating to make sure that supply chains are not weaponised against them, Canada Trade Minister Maninder Sidhu said. The group has agreed to act to protect shared national and economic security interests, a UK government spokesperson said.
At the G7 discussions on Wednesday in Washington, officials will also discuss how to increase pressure on the Kremlin, particularly steps to expand the use of frozen Russian assets to help Ukraine, according to Germany’s Klingbeil. BLOOMBERG
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