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Washington: Treasurer Jim Chalmers will be asked to join a US-led fight against China’s latest attempts to control global supplies of critical minerals as he arrives in Washington for a financial summit days before Anthony Albanese meets with Donald Trump.
US Treasury Secretary Scott Bessent said allies, including Australia, would present a “fulsome response” to Beijing’s plan to expand export controls on rare earths, such as a sweeping new requirement for companies worldwide to seek approval to export products containing even small traces of minerals sourced from China.
Treasury Secretary Scott Bessent said the US was pursuing a co-ordinated response with allies, including Australia.Credit: AP
“This is China versus the world. It’s not a US-China problem,” Bessent said at a Washington event hosted by television network CNBC.
“We’re going to be speaking with our European allies, with Australia, with Canada, with India and the Asian democracies, and we’re going to have a fulsome group response to this because bureaucrats in China cannot manage the supply chain or the manufacturing process for the rest of the world.
“We have lots of levers that we can pull for products that they [China] need that could be equally damaging. We’re going to assert sovereignty; so are the Western allies.”
Bessent noted his counterparts were in town for a World Bank and International Monetary Fund summit this week. That includes Chalmers, who is due to meet Trump’s National Economic Council director Kevin Hassett, and global investors in New York, among others.
Jim Chalmers (from left) visited Washington in February where he met US Treasury Secretary Scott Bessent, pictured with Trump’s National Economic Council director Kevin Hassett and ambassador to the US Kevin Rudd. Credit: Michael Butcher Photography, supplied by the Australian Embassy in Washington
At a separate news conference in Washington, United States Trade Representative Jamieson Greer also referred to Australia, noting it had previously been the victim of retaliatory trade actions by China, along with the US, Europe and Canada.
The new Chinese controls, if enacted, would mean that “if a smartphone is made in Korea and sold to Australia, then the company would first need to get China’s approval, since the phone contains semiconductors which may contain rare earths sourced from China”.
“Obviously, neither we nor our allies are going to go along with that kind of system,” Greer said. “It’s a clear repudiation of everything we’ve been working toward for the last six months.
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“The United States won’t stand for it... [But] this is not just about the United States. China’s announcement is nothing more than a global supply chain power grab.”
Heightened tensions over rare earths are a potential boon for Albanese as he prepares to meet Trump at the White House on Monday, armed with a proposal to supply critical minerals to the US.
The Australian government, including Trade Minister Don Farrell and ambassador to the US Kevin Rudd, has been scrambling to lock in the deal ahead of Albanese’s visit.
The all-important minerals are vital for military hardware, smartphones, electric vehicles and all manner of chip-driven products. Australia has about 36 of the 50 mineral commodities that the US deems critical.
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Since Trump backed away from unprecedented 145 per cent tariffs on Chinese goods earlier this year, the two economic superpowers have agreed to a series of 90-day truces while engaged in tough trade negotiations.
Those talks have soured, however, with Trump last week threatening to impose 100 per cent tariffs on China if it proceeded with additional export controls on rare earths.
Bessent said on Thursday (AEST) the two countries were still engaged in “working level meetings”, and he expected Trump would still meet Chinese President Xi Jinping at the ASEAN summit in Malaysia later this month as planned. “As far as I know, President Trump is a ‘go’ on that,” Bessent said.
But he said the latest provocations from Beijing should be a clear sign to US allies that they must work together to de-risk supply chains and diversify away from China as quickly as possible.
Before leaving for the US, Chalmers said he would use the trip to sell Australia as an investment destination at a time of global churn and uncertainty.
“Whether it’s the AI [artificial intelligence] opportunity or cleaner and cheaper energy, we’ve got a great story to tell the world, and I intend to tell it,” he said.
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