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By Micah McCartney
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Beijing has reportedly threatened South Korean companies over exports to the United States that contain critical metals from China, according to South Korean media.
The report comes as both Washington and Beijing pressure trade partners to pick sides in their tit-for-tat trade war.
Why It Matters
President Donald Trump imposed sweeping tariffs, or taxes on foreign imports, on scores of nations earlier this month in a bid to reshape the global trade order and bring back factory jobs. The 90-day pause he abruptly announced soon after excluded China, the U.S.'s third-largest trade partner.
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Beijing's retaliatory measures included reciprocal tariffs and export restrictions on rare earth elements. China dominates the refining of these metals, which are key to technologies ranging from artificial intelligence chips to jet engines and the development of next-generation weapons platforms, including sixth-generation fighter jets.
Newsweek reached out to the Chinese embassy in South Korea and the South Korean embassy in the United States via email for comment. China's embassy in the U.S. declined to comment, referring Newsweek to the "competent authorities."
What To Know
The Korean Economic Daily reported Tuesday that China's government ordered at least two South Korean transformer manufacturers to halt exports of power equipment containing Chinese-sourced heavy rare earth metals to the U.S. military or its contractors.
The letters reportedly warned that failure to comply could result in regulatory action, including sanctions.
According to a South Korean government official cited by the newspaper, companies in the electric vehicle, display, battery, medical device, and aerospace industries had received similar notices.
The report, which Newsweek has not independently verified, would mark the first time China had formally targeted a third country in its trade dispute with the U.S.
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China–South Korea relations are hitting new roadblocks amid Seoul's concerns that Chinese installations in the Yellow Sea may be part of a broader campaign to assert territorial claims. Beijing maintains that the structures are intended solely for aquaculture.
If Beijing—Seoul's top trade partner—moves to further leverage its economic clout it could have a serious impact on its neighbor's export-driven economy.
Meanwhile, China has been working to rally international support against U.S. President Donald Trump's protectionist trade policies, positioning itself as a responsible and stable alternative to the United States.
Last week, Chinese President Xi Jinping embarked on a whirlwind tour of Southeast Asia to bolster China's influence in the region. On Tuesday, Japanese media reported that Prime Minister Fumio Kishida received a letter from Chinese No. 2 Premier Li Qiang, urging him to join Beijing in resisting protectionism.
What People Are Saying
Han Ah-reum, researcher at the Korea International Trade Association, told The Korean Economic Daily: "As China is expanding its list of US companies that will face Beijing's export bans on top of its retaliatory tariffs in response to Washington's duties, major Korean conglomerates leading the country's exports could take a bigger hit."
A spokesperson for China's Commerce Ministry told reporters on April 4: "The relevant items have dual-use properties, and it is a common international practice to impose export controls on them. As a responsible major country, [the move] reflects its consistent position of firmly safeguarding world peace and regional stability."
Mark A. Smith, CEO of U.S.-based minerals development company NioCorp Developments, told Access Newswire: "The U.S. has long known that it walks a fine line by relying so heavily on China for rare earths. With this new move, Beijing is jamming its fingers on the pressure points of American deterrence."
What Happens Next
Following reports that the Trump administration was pressuring trade partners to reduce imports of Chinese goods or raise barriers against them, China warned against what it described as a policy of "apeasement."
In the wake of Beijing's stiff pushback, Trump appeared to soften his rhetoric, stating on Tuesday that he has a good relationship with Xi and suggesting tariffs could "come down substantially."
China's Foreign Ministry said the country is open to negotiations but on Thursday demanded that the U.S. first remove "all unilateral tariffs imposed on China" as a sign of good faith.
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