China’s Ministry of Commerce (Mofcom) Sunday morning issued a statement apparently in response to Trump’s earlier threat to impose a 100% tariff against Chinese goods, which he said was due to China’s “surprising“ actions with regard to rare earth export controls.
The statement in full is posted below, but first, the TLDR version.
China’s actions with regard to RE export control is in accordance with Chinese laws, and follow a consistent policy of preventing RE from being used in military buildups that can undermine peace and stability.
China notified relevant countries before announcing the latest RE export control so Before announcing the measures, so any claims that China acted in “surprise“ are unsubstantiated.
Export control is not an Export ban. China will continue to actively evaluate export requests to satisfy legitimate uses of China’s RE.
Even after the trade talks between China and the U.S. in Madrid, Washington has imposed a series of restrictive measures against China, which should be viewed as the backdrop of China’s latest move on RE.
The decision to impose fees on U.S. vessels in Chinese seaports is in direct response to a USTR decision in April. The U.S. refused to walk back the decision despite repeated constructive attempts by Beijing to resolve the issue, forcing Beijing to impose a countermeasure.
Full Mofcom statement:
MOFCOM Spokesperson’s Remarks on China’s Recent Economic and Trade Policies and Measures
1. Q: On October 9, the Ministry of Commerce and the General Administration of Customs published an announcement on imposing export control measures on related rare earth items. What are China’s considerations behind this?
A: China’s announcement of export control measures on rare earths and related items is a legitimate action by the Chinese government to refine its export control system in accordance with laws and regulations. In the context of turmoil and frequent military conflicts in the world, China has taken note of the important uses of medium and heavy rare earths and related items in the military field. China, as a responsible major country, employs export controls on related items according to the law, in order to better defend world peace and regional stability, and to fulfill non-proliferation and other international obligations.
China’s export controls are not export bans. Licenses will be granted for eligible applications. Before the measures were announced, China had already notified relevant countries and regions through bilateral export control dialogue mechanisms. China stands ready to work with the rest of the world to step up export control dialogue and exchange, so as to better safeguard the security and stability of global industrial and supply chains.
2. Q: We have noted that recently the Ministry of Commerce has issued an announcement strengthening export controls on rare earths and related items. Could you please introduce the follow-up measures of implementation?
A: As a responsible major country, China always firmly safeguards its national security and international common security, always takes a just and reasonable principled position and implements export control measures in a prudential and moderate manner. China had made thorough assessment of the measures’ possible impact on industrial and supply chains in advance and is certain that related impact is very limited. Before announcing the measures, China had notified relevant countries and regions through bilateral export control dialogue mechanisms.
Going forward, the Chinese government will conduct reviews in accordance with laws and regulations, grant licenses to eligible applications, as well as actively considering the applicability of facilitation measures such as general licenses and license exemptions to effectively promote legitimate trade. I want to emphasize that China’s export controls are not export bans. All applications of compliant export for civil use can get approval, so that relevant businesses have no need to worry. The Chinese government will work with all countries as always, to firmly safeguard world peace and stability in neighboring regions, and jointly maintain the stability of global industrial and supply chains.
3. Q: On October 10 EST, the U.S. announced that, in response to China’s export control on rare earths and related items, the U.S. will impose a tariff of 100% on China, and impose export control on all critical software. What are MOFCOM’s comments on this?
A: China has taken note of the situation. On October 9, China released export control measures on rare earths and related items, which are normal actions taken by the Chinese government in accordance with laws and regulations to refine its own export control system. As a responsible major country, China always firmly safeguards its national security and international common security, always takes a just and reasonable principled position and implements export control measures in a prudential and moderate manner. The U.S. remarks reflect textbook “double standard”. For a long time, the U.S. has been overstretching the concept of national security, abusing export control, taking discriminatory actions against China, and imposing unilateral long-arm jurisdiction measures on various products including semiconductor equipment and chips. The U.S. Commerce Control List (CCL) covers over 3000 items, whereas China’s Export Control List of Dual-use Items only cover about 900. The U.S. has long imposed the ‘de minimis’ rule for export controls, with a lowest threshold of 0%. These measures of U.S. side have seriously harmed the legitimate and lawful rights and interests of companies, severely disrupted the international economic and trade order, and gravely undermined the security and stability of global industrial and supply chains.
Particularly since the China-U.S. economic and trade talks in Madrid in September, the U.S., in just 20 days, has introduced a string of new restrictive measures targeting China. It has put multiple Chinese entities on the Entity List and Special Designated National List; arbitrarily expanded the scope of control over businesses with the Affiliates Rule that affects thousands of Chinese companies; and persisted with the implementation of Section 301 measures targeting China’s maritime, logistics and shipbuilding industries in disregard of China’s concerns and goodwill. The U.S. actions have severely harmed China’s interests and undermined the atmosphere of bilateral economic and trade talks, and China is resolutely opposed to them.
Willful threats of high tariffs are not the right way to get along with China. China’s position on the trade war is consistent: we do not want it, but we are not afraid of it. China urges the U.S. to promptly correct its wrong practices, adhere to the important consensuses of the phone calls between the two heads of state, protect the hard-won outcomes of consultations, continue to use the China-U.S. economic and trade consultation mechanism, and address respective concerns and properly manage differences through dialogues and on the basis of mutual respect and equal-footed consultation, so as to ensure the stable, sound and sustainable development of the China-U.S. economic and trade relationship. If the U.S. insists on going the wrong way, China will surely take resolute measures to protect its legitimate rights and interests.
4. Q: The U.S. will impose port fees on related Chinese vessels on October 14. We have noted that China has announced countermeasures in response. What is China’s comment?
A: On April 17, the USTR announced the final action of Section 301 investigation into China’s maritime, logistics and shipbuilding sectors and will impose port fees on related Chinese vessels from October 14. The U.S. practice severely violates the WTO rules and breaches the principle of equality and mutual benefit of the China-U.S. Maritime Transport Agreement, and is a typical act of unilateralism. China has repeatedly expressed its strong dissatisfaction and firm opposition.
Since the economic and trade talks in London, China has engaged in consultations and communications with the U.S. on the measures mentioned above, provided a written reply to the groundless accusations against China in the Section 301 investigation report, and made recommendations of potential bilateral cooperation in related industries. However, the U.S. has shown a negative attitude and willfully persists in implementing those measures, issuing a notice on October 3 setting out the specific requirements for imposing fees on Chinese vessels. In order to safeguard its legitimate and lawful rights and interests, China has to take countermeasures and decides to charge special port fees on U.S.-linked vessels in accordance with the Regulations of the People’s Republic of China on International Ocean Shipping and other laws and regulations. China’s countermeasures are necessary acts of passive defense and are aimed at maintaining the legitimate rights and interests of Chinese industries and enterprises, as well as the level playing-field of the international shipping and shipbuilding markets. It is hoped the U.S. will face up to its mistake, move with China in the same direction, and return to the right track of dialogue and consultation.
The Trump and his administration is a group of incompetent and inexperienced group of bigots. So Chinese government and its administrators should use the toughest measures to stop and to prevent all the unreasonable demands from the poisonous Americans
China reveals her iron fist in a velvet glove. Telling the US to eff off without using the eff word. An object lesson in the art of the deal delivered by way of the art of diplomacy.