An imposition of a sweeping 100% tariff on Chinese products is being floated by President Donald Trump, which will take effect as early as November 1. This dramatic move follows China’s latest decision to tighten controls on its rare earth exports, which are vital materials for American industries like defence and electronics.
Speaking on his social media platform Truth Social late Friday, Trump accused Beijing of acting in a “very hostile” way by expanding restrictions on key rare earth minerals. In response, he promised not only to raise tariffs but also to introduce strict new export controls on “any and all critical software.”
“I never thought it would come to this, but perhaps, as with all things, the time has come,” Trump wrote. “Ultimately, though potentially painful, it will be a very good thing for the USA.”
The renewed trade threats rattled financial markets. Wall Street closed sharply lower, with the S&P 500 dropping 2.7%, marking its worst day since April. The Dow Jones plummeted to 1.9%, and the Nasdaq dipped by 3.6%, triggered by considerable losses in tech stocks, including an approximately 5% diminution in chipmaker Nvidia.
China’s supremacy in rare earths, in control of more than 90% of the world’s processed supply, has been a tactical concern for the US. These rare earth elements are vital to the manufacture of smartphones, wind turbines, electric vehicles, and military equipment. Beijing’s latest action of adding five new rare earth materials to its control list aggravated worries of global supply chain interruptions.
Trump, who has made economic nationalism a key focus of his policy agenda, warned that China’s monopolistic control over these resources was part of a larger plan to hold the world “captive.”
“There is no way that China should be allowed to hold the world ‘captive,’ but that seems to have been their plan for quite some time,” he wrote, specifically mentioning rare-earth magnets. “But the US has monopoly positions also, much stronger and more far-reaching than China’s.”
The former president’s tariff warning marks a sharp change from earlier this year, when tensions between Washington and Beijing seemed to ease. After months of negotiations, both sides had agreed to partially roll back tariffs, reducing US rates on Chinese goods to 30% and China lowering its own duties to 10%. At that time, Trump described relations with China as “excellent.”
Now, that fragile truce appears to be falling apart. Trump suggested that a planned meeting with Chinese President Xi Jinping later this month in South Korea might not happen. “There seems to be no reason” to proceed with the summit, he said.
The return to Trump’s uncompromising trade stance could have widespread effects on global trade, inflation, and economic growth. Still, Trump remained defiant, hinting at more punitive measures to come.
“A massive increase in tariffs on Chinese products… is just one of the policies under serious consideration,” he said. He signalled that his administration, if reelected, would double down on economic confrontation with China.
As geopolitical tensions rise and global markets react nervously, the prospect of a new round of tariff warfare looms, this time with even higher stakes and fewer diplomatic safeguards.
