US Senator Steve Daines has urged Washington and Beijing to avoid escalating tensions through tit-for-tat actions, citing China’s recent export controls against American rare earth firms and the Pentagon’s decision to blacklist several Chinese technology companies.
“These are unfortunate developments,” the Republican Senator from Montana said on Monday. Daines is a member of two of the most powerful committees in the US Senate: the Foreign Relations and Finance Committees.
“The escalation on both sides here is something I was hoping would not happen,” he added.
Weeks after US President Donald Trump and Chinese leader Xi Jinping agreed to easing of tensions during their summit in Beijing, both sides have resumed retaliatory actions, highlighting the fragility of the truce and the persistent distrust between the world’s two largest economies.
Last week, China targeted two US rare earth giants – MP Materials and USA Rare Earths – along with eight other American firms, which were hit with stringent export controls, and barred 46 US firms from government procurement.
The regulations prohibit exporters from supplying dual-use goods to the 10 companies and ban any organisation or individual worldwide from transferring China-origin dual-use items to them, extending the restrictions beyond China’s borders.
Beijing said its measures were a response to the Pentagon’s decision to designate leading Chinese technology firms as military-linked entities.
In early June, the Pentagon added more than 60 Chinese companies – including Alibaba, Baidu and BYD – to its list of “Chinese military companies operating in the United States.”
Alibaba sued the Department of Defence last week, arguing that it was added to the list without substantial evidence or explanation. It also alleged violation of constitutional due process and the company’s right to free speech. Alibaba owns the South China Morning Post.
Ro Khanna, the ranking member of the US House Select Committee on China, described Beijing’s actions as “wrong” and vowed measures to reduce Washington’s dependence on Beijing for critical materials.
“They hold this monopoly. There can’t be a rule of monopoly on something like that,” said the Democratic representative from California.
“We are looking at how we can have independence on rare earths and critical minerals, and working with other allies.”
US Congress is aggressively advancing bipartisan legislation, including the SECURE Minerals Act and the Critical Mineral Consistency Act, to secure domestic supply chains and counter China’s dominance in the sector.
China holds an effective monopoly over the processing of key critical minerals, including graphite, gallium, germanium and rare earth elements, which are essential for military systems, consumer electronics and renewable energy technologies.
Beijing has increasingly leveraged this position, introducing export controls last April in response to US tariffs that disrupted global supply chains and forced factory shutdowns. A temporary US-China truce in October last year helped avert a deeper crisis. However, the recent Trump-Xi meeting left the issue unresolved.
Alongside Congress, the Trump administration has poured billions into reviving domestic mineral capacity and signed a series of bilateral and multilateral agreements, but analysts have warned that reducing China’s dominant position would take years, if not decades.
Despite the tensions, Daines asserted that US-China relations “are in a much better position than it was a year ago” and hoped that Xi’s upcoming visit to the US would keep the ties stable.
“President Xi and President Trump speak frequently. We’ll continue to sort through these disagreements,” he added. -- SOUTH CHINA MORNING POST
