US warned of China rare earth curbs if Section 301 tariffs expand

Beijing could resume restrictions on rare-earth exports and halt purchases of United States soybeans if Washington insists on “making trouble” by proceeding with new tariffs under Section 301 of the Trade Act, according to Chinese commentators and policy observers.

The unofficial warnings came after the United States Trade Representative (USTR) on Thursday announced the initiation of Section 301 investigations into the trade practices of 16 countries, including China. The USTR also launched separate Section 301 probes into 60 economies to determine whether they have failed to curb imports of goods produced with forced labor, such as cotton from Xinjiang.

Officially, a spokesperson for China’s Ministry of Commerce China has fulfilled its obligations under the Phase One Agreement signed with the US in early 2020, including commitments on intellectual property protection and opening financial and agricultural markets, but the Trump administration did not do thesame.

“Since early 2020, the US has tightened export control on China, restricted two-way investment and continuously escalated measures in economic, trade and other areas, which have hindered normal bilateral trade and investment activities,” the ministry’s spokesperson said. “These measures have violated the spirit of the agreement and undermined the atmosphere and conditions for its implementation.”

The spokesperson added that the two sides have held five rounds of economic and trade consultations since last year, covering tariffs, agricultural trade, export controls, investment restrictions and the Phase One Agreement. He said China is ready to work with the US to follow the consensus reached by the two countries’ leaders, use the consultation mechanism, implement existing agreements and explore areas of shared interest.

“China hopes that the US side will adopt an objective and rational view of the implementation of the agreement and refrain from shifting blame and passing the buck or using it as an excuse for trouble-making or provocation,” he said. “If the US insists on advancing the investigation or even imposes tariffs or other restrictive measures through the investigation, China will take all necessary measures to firmly safeguard its lawful rights and interests.”

The USTR’s latest move and Beijing’s response have increased political tensions between the US and China ahead of a summit between Chinese President Xi Jinping and US President Donald Trump in Beijing in late March or early April. To prepare for this summit, US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng will meet in Paris from March 14 to 17.

Soybean purchases

The Phase One Agreement,signed in Washington in January 2020 by Trump and Chinese Vice Premier Liu He,required China to increase purchases of US goods and services by US$200 billion above 2017 levels by 2021. However, Beijing largely stopped fulfilling its promises during former US President Joe Biden’s administration, from early 2021 to 2025, until Trump returned and imposed tariffs of up to 145% on Chinese goods last April.

To de-escalate the situation, China resumed significant purchases of US soybeans in late 2025 after a trade truce between Trump and Xi, committing to buy at least 12 million metric tons by early 2026, with further purchases expected through 2028. Tensions have risen again with the new round of Section 301 probes.

Although the Commerce Ministry did not specify in its latest comments what “necessary measures” it might take, Chinese commentators said the reference to the Phase One Agreement suggests that suspending purchases of US soybeans could be an option. They also added that China might consider using its rare-earth card.

A Henan-based columnist writing under the pen name “Weihang Duwang” says Washington is under pressure from rising fuel prices and domestic political constraints ahead of the mid-term elections in November.

“What has pushed Washington to resort to these tactics? First is oil prices. Tensions in the Middle East have pushed US gasoline prices up by 19% to about US$3.54 per gallon, shaking Trump’s support from his voters,” he writes.“The second factor is last month’s Supreme Court ruling, which stated that the president cannot freely impose tariffs under an economic emergency.”

He says Trump launchedSection 301 investigations against 16 trading partners to pressure them into concessions and ease economic pressure at home. He says the probes are also meant to create bargaining chips for the US ahead of Trump’s planned visit to Beijing, where rare earths and soybeans are expected to be key issues.

“China has already fulfilled its commitment to purchase about 12 million tons of US soybeans earlier this year, but buying slowed sharply after February,” he says. “US military operations in the Middle East are rapidly depleting American stockpiles of ammunition, increasing demand for critical minerals in which China plays a dominant role.”

You Danhong, a Shandong-based writer, says the US remains heavily dependent on Chinese rare earth elements for key defense technologies.

“Military media have reported that some components in the US F-35 stealth fighters use alloy magnets produced in China,” he says. “Industry experts estimate that US defense contractors may only have a few months of rare-earth stockpiles, not several years. If supplies are disrupted, costs will surge while some production lines could even stop.”

“The US wants to build an alternative supply chain, but it’s easier said than done,” he says. “Opening mines, building processing plants, meeting environmental rules and training workers could take five to 10 years.”

“The USTR investigation lists industries such as steel, batteries, semiconductors and automobiles,” he says. “But all of them depend on critical materials like rare earths. When Washington talks about other countries’ excess capacity, it may forget that the supply of rare elements is not fully under its own control.”

Probes targeting China

The US Supreme Court ruled on February 20 that the International Emergency Economic Powers Act (IEEPA) does not allow the president to impose such duties. Trump responded by ordering a temporary 10% tariff on all countries for 150 days under Section 122 of the Trade Act of 1974, meaning the administration must finish the Section 301 probes by July 20 to impose new tariffs.

The 16 economies targeted by the investigations ae China, the European Union (EU), Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, South Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan and India.

“China maintains a global goods trade surplus across its economy, led by exports in sectors such as electronic equipment, machinery, automobiles and auto parts, plastics, furniture, iron and steel products, apparel, organic chemicals, toys, optical and medical equipment, footwear, ships and aluminum,” the USTR said.

“Evidence suggests that China’s goods trade surplus is driven by increasing excess manufacturing capacity and production in numerous sectors. In some of these sectors, Chinese excess capacity has driven global overcapacity.”

The USTR cited studies showing China’s industrial capacity is rising, noting it accounted for 54% of global excess steel capacity in the third quarter of 2025, up from 47% a year earlier. It added that China’s lithium‑ion battery output was nearly twice its domestic installations in 2022, and that cheaper Russian oil has helped expand polyethylene terephthalate (PET) production, adding to global oversupply.

The USTR’s probes into alleged forced labor practices in 60 countries focus heavily on China. Itsaid the List of Goods Produced by Child Labor or Forced Labor (or the TVPRA list, referring to the TraffickingVictims ProtectionReauthorization Act) includes 34 downstream goods in particular countries produced with inputs linked to forced labor.

Key steps cited by the US Department of Labor’s Bureau of International Labor Affairs (ILAB):

• 2020: Added five goods linked to forced labor by Uyghurs and other Muslim groups in Xinjiang.
• 2021: Added polysilicon from China due to alleged forced‑labor links.
• 2022: Added four solar‑supply‑chain products: ingots, wafers, cells and modules.
• 2024: Added new goods linked to forced labor, including aluminum, caustic soda, jujubes, metallurgical‑grade silicon, polyvinyl chloride and squid, as well as downstream products such as cotton textiles and garments, thread or yarn, and auto parts tied to Xinjiang‑origin materials.

Chinese foreign ministry spokesperson Guo Jiakun said the so‑called issue of “forced labor” is disinformation created by the US and should not be used as a pretext for political manipulation. He added that China opposes any form of unilateral tariff measures.

Read: China warns of retaliation as Trump unveils new tariff plan

Follow Jeff Pao on Twitter at@jeffpao3