China accused the United States on Thursday of fueling "panic" over Beijing's new limits on rare earth exports.

However, China has signaled that it remains open to negotiating a solution to the trade dispute, which has raised tensions between the two major economies, according to CNBC.

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‘Misunderstanding And Panic’

According to the state-run Global Times, Commerce Ministry spokesperson He Yongqian told reporters that Washington's comments overstate China's actions.

"The US interpretation seriously distorts and exaggerates China's measures, deliberately creating unnecessary misunderstanding and panic," Yongqian said.

Last week, Beijing announced broad restrictions on shipments of rare earth minerals just ahead of a planned meeting between President Trump and President Xi Jinping in South Korea.

In response, Trump warned he could impose 100% tariffs on Chinese goods as early as Nov. 1.

US Domestic Supply

Rare earth materials are key inputs for U.S. defense systems, as well as for civilian uses including robotics, EVs and semiconductors.

China currently dominates global production of rare earths, leaving the U.S. heavily reliant on imports.

The Trump administration is pushing to build an independent domestic supply chain. The administration recently struck deals with MP Materials Corp. (NYSE:MP), Trilogy Metals, Inc. (AMEX:TMQ) and Lithium Americas Corp. (NYSE:LAC) to bolster the domestic production of rare earth elements.

On Wednesday, Treasury Secretary Scott Bessent said that Washington may consider taking stakes in other companies after China's latest move. He said the situation highlights America's need for self-sufficiency or strong cooperation with allies.

Bessent also accused Beijing of manipulating the market by flooding it with cheap refined products to drive out foreign competitors.

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