US President Donald Trump has announced plans to impose an additional 100% tariff on imports from China starting next month, a move that threatens to reignite a full-scale trade war between the world’s two largest economies.
In a social media post, Trump also revealed that the US would introduce new export controls on critical software, escalating pressure on Beijing following its recent decision to tighten export rules for rare earth materials. These elements are crucial for the manufacturing of cars, smartphones, and defence equipment.
The latest exchange follows China’s move to strengthen control over rare earth exports, which Trump said showed Beijing was “becoming very hostile” and attempting to hold the world “captive.” The US president even hinted he might withdraw from an upcoming meeting with Chinese President Xi Jinping, though he later clarified he still plans to attend.
Trump’s comments triggered a market slump, with the S&P 500 falling 2.7%, its sharpest drop since April. The impact of strained trade relations is being felt across industries, particularly those reliant on Chinese materials. Ford previously had to pause production when rare earth supplies tightened earlier this year.
Meanwhile, China has launched a monopoly investigation into Qualcomm, a major US chipmaker, potentially stalling its acquisition plans. Beijing also plans to introduce new port fees targeting ships owned or operated by US firms.
Analysts view these developments as a strategic move by Xi to gain leverage ahead of new trade talks. Jonathan Czin of the Brookings Institution noted that China appears confident it can withstand US pressure, citing its dominance in critical mineral production.
Experts believe negotiations are still possible, as China’s new export rules take effect in December, leaving room for dialogue. However, with tensions mounting, the global economy may once again face uncertainty as Washington and Beijing brace for another round of tariff battles.
