Rio Tinto CEO predicts 'common sense would prevail' amid escalating trade tensions

  • Trade tensions have risen significantly between the U.S. and China, but common sense will ultimately prevail between the two countries, according to the chief of major mining company Rio Tinto.
  • Open trade is a major driver for the mining industry wherein products are moving from one country to another, according to Jean-Sébastien Jacques, CEO of Rio Tinto.
  • He told CNBC he hopes that the two countries can sit down and work out their trade issues and that the next 45 to 60 days would be important.

Trade tensions have risen significantly between the United States and China this month, but the chief of a major mining company told CNBC he's sure that common sense will prevail between the two countries.

Open trade is a major driver for the mining industry wherein many products are moving from one country to another, according to Jean-Sébastien Jacques, CEO of Rio Tinto.

"Our belief (is) that both China and the U.S. are great trading nations, and maybe there are some differences, but I'm sure that common sense would prevail at the end of the day," Jacques told CNBC at the China Development Forum in Beijing.

"I just hope that they sit together, work out the issues. And clearly, in that context, the next 45 to 60 days are going to be very important. So let's watch it and let's see what happens," he said.

Jean-Sebastien Jacques, chief executive officer of Rio Tinto.
Chris Ratcliffe | Bloomberg | Getty Images
Jean-Sebastien Jacques, chief executive officer of Rio Tinto.

Beijing on Friday said it may target 128 U.S. products with an import value of $3 billion in response to President Donald Trump's executive order earlier this month that imposed broad duties on foreign aluminum and steel imports.

The U.S. president had also announced tariff plans for up to $60 billion in Chinese imports, although China didn't officially connected its Friday threats of retaliation to that White House action.

But in the event trade tensions between the two countries don't simmer down, Jacques said Rio Tinto would continue to focus on its customers as well as assets, which include products like aluminum, copper, diamonds, gold, iron ore and industrial minerals.

"I cannot control the prices, I cannot control the trade regulations, I have to deal with it," he said. "In the meantime, I'm focusing on my customers and on my assets."

Trade uncertainties rose earlier this with the news of new U.S. tariffs on steel and aluminum imports. Since then, the U.S. has exempted Canada and Mexico from those tariffs and said it would grant the European Union and some other countries a temporary exemption.

Rio Tinto's global aluminum business is headquartered in Montreal, Canada. And it operates an alumina refinery, hydroelectric plants and aluminum smelters in Quebec and British Columbia.

"We supply around one-third of all the aluminium that is consumed in the U.S.," Jacques said.

"We're working very closely with our customer either in Canada or in the USA to make sure that the supply chain is as efficient as it can be. That's our priority," he said.

—CNBC's Nyshka Chandran contributed to this report.