In a sharp escalation of longstanding tensions, US President Donald Trump announced on Friday an additional 100 per cent tariff on all Chinese imports, effective November 1, while threatening to scrap an upcoming summit with Chinese President Xi Jinping. The move reignites the trade war between the world’s two largest economies, triggered by Beijing’s new export restrictions on rare earth minerals—vital resources for global tech and defence industries.
Trump, who returned to the White House in January, framed the tariffs as a direct retaliation for what he described as China’s “extraordinarily aggressive” and “very hostile” actions. “It is impossible to believe that China would have taken such an action, but they have, and the rest is History,” he posted on Truth Social, his social media platform. The new levies, layered atop existing duties, will also be accompanied by sweeping US export controls on “any and all critical software,” aimed at curbing Beijing’s technological edge.
The announcement sent shockwaves through financial markets, with the Nasdaq plunging 3.6 per cent and the S&P 500 dropping 2.7 per cent—the steepest declines in months—as investors braced for broader economic fallout. Chinese goods already face 30 per cent US tariffs, imposed earlier under Trump’s accusations of Beijing’s role in the fentanyl trade and unfair business practices. In response, China maintains retaliatory tariffs at 10 per cent, but Friday’s developments signal a potential tit-for-tat spiral.
The Spark: Rare Earth Export Controls
At the heart of the dispute are rare earth elements, essential for manufacturing everything from smartphones and electric vehicles to military hardware and renewable energy tech. China dominates the market, controlling about 70 per cent of global mining and 90 per cent of processing. Hours before the tariff announcement, Trump had fired off a lengthy Truth Social post alleging that Beijing had dispatched letters to countries worldwide, outlining stringent new export controls on these minerals.
“There is no way that China should be allowed to hold the World ‘captive,'” Trump wrote, vowing to counter the “unprecedented” move. The curbs, which require foreign firms to obtain special licences for exports containing even trace amounts of Chinese-sourced rare earths, were seen in Washington as a strategic ploy to leverage Beijing’s monopoly amid ongoing trade frictions.
Trump expressed bewilderment at the timing, noting, “Some very strange things are happening in China! They are becoming very hostile.” He accused Beijing of “lying in wait” after six months of relatively cordial relations, including progress on US oversight of TikTok’s American operations as mandated by last year’s congressional law.
Summit in Jeopardy
The tariffs cast a long shadow over the Asia-Pacific Economic Cooperation (APEC) summit in South Korea later this month, where Trump and Xi were set to hold their first face-to-face meeting since his inauguration. “I was to meet President Xi in two weeks, at APEC, in South Korea, but now there seems to no reason to do so,” Trump declared, underscoring the depth of the rift.
This outburst marks a stark reversal from just weeks ago, when Trump had emphasised the summit’s importance and floated plans for a 2026 visit to China. Other nations have reportedly reached out to Washington, voicing frustration over what Trump called China’s “great Trade hostility, which came out of nowhere.”
Beijing offered no immediate comment, but the move follows its earlier Friday declaration of “special port fees” on US-built and operated ships— a reprisal for Washington’s April charges on Chinese-linked vessels.
A Shaky Truce Unravels
The flare-up revives memories of earlier this year’s tit-for-tat tariff battles, which nearly froze bilateral trade worth trillions. A fragile de-escalation pact brokered in neutral venues like Switzerland and the UK had held tenuously, but underlying grievances persist. Last week, Trump signalled he would press Xi on boosting US soybean imports, a sore point for American farmers—a pivotal bloc in his 2024 election victory—who continue to suffer from prior trade disruptions.
In a related push, the US Federal Communications Commission announced it had removed “millions” of listings for banned Chinese products from e-commerce platforms. FCC Chair Brendan Carr decried the “Communist Party of China” for a “multi-prong effort to insert insecure devices into Americans’ homes and businesses,” posting on X (formerly Twitter).
