China’s decision to tighten licensing on the export of rare-earth minerals will backfire and damage its own economy, National Economic Council Director Kevin Hassett told Newsmax on Friday.
Hassett told “Rob Schmitt Tonight” that Beijing is “wrong” to think it has found the United States’ Achilles’ heel by restricting exports of critical materials used in everything from defense technology to electric vehicles.
“There is no Achilles’ heel in America with Donald Trump as president,” Hassett said. “The retaliatory measures that we can take would be profoundly disruptive to their economy.
“And if you look at the data, their economy is already really on the ropes.”
China announced last week new licensing rules that will require exporters of rare-earth elements — key inputs for electronics — to seek special government approval.
The move is widely viewed as a warning shot in the ongoing U.S.–China trade dispute. President Trump and Chinese President Xi Jinping are expected to meet in South Korea in two weeks.
Hassett said the decision will isolate China further and harm the country’s remaining export markets.
“By putting the critical earth’s new licensing system in place, they basically offended all of their trading partners,” he said.
“The one reason the economy of China isn’t in deep depression, or at least recession, is that they’ve been shipping this stuff to Europe.
“But they just put the constraint on Europe as well, which makes no sense whatsoever.”
Hassett argued that China’s economy is already under severe strain, citing its debt levels as “up to 14%” of gross domestic product when local obligations are included — a figure he compared to struggling South American economies.
He also said Trump has directed the White House and Cabinet agencies to accelerate domestic rare-earth development to eliminate any future leverage China might hold.
“President Trump has instructed the entire White House team to go all in on solving this critical problem,” Hassett said.
Trump’s push includes support for new mining and refining projects in Wyoming and other states, where recent discoveries could make the U.S. one of the world’s top producers of rare-earth minerals.
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