US President Donald Trump has thrown another punch in Washington's long-running economic bout with Beijing , threatening to slap fresh 100% tariffs and export bans in response to China's tightening grip on rare earth minerals.
The uneasy truce between the world's two biggest economies came after months of uneasy calm, sending shockwaves through global markets and raising fears of a renewed economic confrontation.
Trump declared that the United States would impose 100% tariffs on all Chinese goods entering the country, alongside new export restrictions on "critical software" beginning November 1 — just days before existing tariff relief was due to expire.
The US president’s dramatic escalation came hours after China announced expanded export controls on rare earth elements, minerals essential for the manufacturing of electronics, electric vehicles, and defense systems. China currently dominates over 90% of global rare earth processing.
"It was shocking," Trump said of Beijing's move. "I thought it was very, very bad." He described China’s actions as a "hostile order," accusing it of attempting to "hold the world captive" through its control over vital materials.
Trump on meeting with Xi
The fresh round of tariffs also threw into doubt a long-anticipated meeting between Trump and Chinese President Xi Jinping , previously scheduled to take place in South Korea later this month on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit.
"Now there seems to be no reason to do so," Trump had earlier posted on Truth Social, referring to the planned meeting. But later clarified to reporters that the meeting wasn’t officially canceled, but its fate remained uncertain.
"No, I haven't cancelled. However, I'm not sure if we'll have it. I'll be there regardless. I would assume we might have it. However, they hit the world with something. It was shocking. Out of the blue, they came up with this whole import-export concept, and nobody knew anything about it," he said, at the White House.
"I would assume we might have it," he added, suggesting uncertainty over whether dialogue would continue. Beijing has not confirmed the meeting.
Beijing strikes back with rare earth curbs
China's new export rules, unveiled earlier this week, included restrictions on several key rare earth elements and refining technologies, effectively tightening its control over the global supply chain.
The move came alongside an announcement that Beijing would impose extra port fees on US ships starting October 14. These measures mark China's sharpest retaliatory step in months, following Washington’s earlier restrictions on Chinese semiconductor access and the blacklisting of several Chinese firms.
Beijing has repeatedly accused the US of undermining global trade norms through unilateral sanctions and tariffs. The rare earth dispute has particularly alarmed the automotive, tech, and defense industries, which rely heavily on Chinese exports for critical components, Reuters reported.
Past restrictions on these materials have already disrupted global production lines — with US automakers such as Ford previously forced to pause production due to supply shortages.
Beijing's new policy adds five elements and multiple refining technologies to its restricted list and requires foreign producers using Chinese materials to comply with its rules — potentially extending China’s regulatory reach beyond its borders.
Meanwhile, reports emerged that Chinese regulators had opened a monopoly investigation into US chipmaker Qualcomm, a move that could further escalate tensions and stall planned acquisitions in the semiconductor space.
'Financially countering' China's move
In a lengthy post on Truth Social, Trump accused China of issuing a “hostile order” and claimed that multiple countries had contacted Washington, expressing outrage over Beijing’s restrictions.
"They are becoming very hostile, sending letters to countries throughout the world… Nobody has ever seen anything like this," Trump wrote. "Our relationship with China was a good one, but now, as usual, I have been proven right."
He added that the US "has monopoly positions much stronger and more far-reaching than China’s," and vowed to "financially counter their move."
Among the measures under consideration are new export controls on aircraft parts, and restrictions on US software and technology sales to Chinese firms — a move that could severely impact China’s AI and cloud computing industries.
Markets react: global selloff and investor panic
Trump’s tariff threat sent tremors through global financial markets. The S&P 500 Index plunged over 2.7%, its steepest one-day drop since April, while tech-heavy Nasdaq stocks also slumped amid fears of escalating US-China tensions.
Gold prices spiked as investors sought safe havens, and the US dollar weakened against major currencies. Experts say the latest escalation could mark a decisive shift in the trade dynamic between Washington and Beijing.
"Today’s sharp sell-off reflects renewed fears that the US is escalating trade tensions with China, particularly the threat of a large hike in tariffs and the cancellation of the meeting with President Xi. These moves inject real risk into global supply chains, corporate margins, and investor sentiment," Anshul Sharma, chief investment officer at Savvy Wealth, New York told Reuters.
"We think this is less about valuations and more about sentiment. Fundamentally, corporate earnings and balance sheets remain healthy, but when policy uncertainty spikes, as it did with today’s tariff headlines, investors tend to de-risk quickly. In our view, this is a sentiment-driven pullback within an otherwise resilient market backdrop," Sharma added.
Sharma further warned that if tensions persist and begin affecting corporate earnings, "the market could see a more drawn-out adjustment."
"Trump's post could mark the beginning of the end of the tariff truce," Craig Singleton, senior fellow at the Foundation for Defense of Democracies. told the agency. "Beijing appears to have overplayed its hand, and Washington is responding with maximum pressure."
Mike Brown, senior strategist at Pepperstone, London, called Trump’s move "a bolt from the blue." "It’s a bolt from the blue from Trump and after the rare earth news earlier ... the timing is a big surprise. The key thing market participants will be focused on as we move into the weekend and next week, is: are we now looking at having to tear up the assumptions we did have that trade was a done deal and now look at a re-escalation of tensions between the two," Brown said.
Both sides were expected to discuss trade, technology, and investment cooperation during the APEC summit beginning October 31 in South Korea. Now, with the latest developments, those talks are in jeopardy.
What's next & why it matters
Just months ago, the US and China had paused their trade hostilities following rounds of diplomatic engagement. But with Trump’s latest announcement, experts fear a return to the tariff battles that rocked global trade during his previous term.
Beijing has not yet announced retaliatory measures against the new US tariffs, but state media has called Washington’s actions "reckless" and "provocative." The Chinese foreign ministry, when asked for comment, said only that “dialogue must be based on mutual respect, not threats.”
With the world’s two largest economies once again on a collision course, analysts warn that the global supply chain — already strained by inflation and geopolitical conflict — could face fresh turbulence.
The uneasy truce between the world's two biggest economies came after months of uneasy calm, sending shockwaves through global markets and raising fears of a renewed economic confrontation.
Trump declared that the United States would impose 100% tariffs on all Chinese goods entering the country, alongside new export restrictions on "critical software" beginning November 1 — just days before existing tariff relief was due to expire.
The US president’s dramatic escalation came hours after China announced expanded export controls on rare earth elements, minerals essential for the manufacturing of electronics, electric vehicles, and defense systems. China currently dominates over 90% of global rare earth processing.
"It was shocking," Trump said of Beijing's move. "I thought it was very, very bad." He described China’s actions as a "hostile order," accusing it of attempting to "hold the world captive" through its control over vital materials.
Trump on meeting with Xi
The fresh round of tariffs also threw into doubt a long-anticipated meeting between Trump and Chinese President Xi Jinping , previously scheduled to take place in South Korea later this month on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit.
"Now there seems to be no reason to do so," Trump had earlier posted on Truth Social, referring to the planned meeting. But later clarified to reporters that the meeting wasn’t officially canceled, but its fate remained uncertain.
"No, I haven't cancelled. However, I'm not sure if we'll have it. I'll be there regardless. I would assume we might have it. However, they hit the world with something. It was shocking. Out of the blue, they came up with this whole import-export concept, and nobody knew anything about it," he said, at the White House.
"I would assume we might have it," he added, suggesting uncertainty over whether dialogue would continue. Beijing has not confirmed the meeting.
Beijing strikes back with rare earth curbs
China's new export rules, unveiled earlier this week, included restrictions on several key rare earth elements and refining technologies, effectively tightening its control over the global supply chain.
The move came alongside an announcement that Beijing would impose extra port fees on US ships starting October 14. These measures mark China's sharpest retaliatory step in months, following Washington’s earlier restrictions on Chinese semiconductor access and the blacklisting of several Chinese firms.
Beijing has repeatedly accused the US of undermining global trade norms through unilateral sanctions and tariffs. The rare earth dispute has particularly alarmed the automotive, tech, and defense industries, which rely heavily on Chinese exports for critical components, Reuters reported.
Past restrictions on these materials have already disrupted global production lines — with US automakers such as Ford previously forced to pause production due to supply shortages.
Beijing's new policy adds five elements and multiple refining technologies to its restricted list and requires foreign producers using Chinese materials to comply with its rules — potentially extending China’s regulatory reach beyond its borders.
Meanwhile, reports emerged that Chinese regulators had opened a monopoly investigation into US chipmaker Qualcomm, a move that could further escalate tensions and stall planned acquisitions in the semiconductor space.
'Financially countering' China's move
In a lengthy post on Truth Social, Trump accused China of issuing a “hostile order” and claimed that multiple countries had contacted Washington, expressing outrage over Beijing’s restrictions.
"They are becoming very hostile, sending letters to countries throughout the world… Nobody has ever seen anything like this," Trump wrote. "Our relationship with China was a good one, but now, as usual, I have been proven right."
He added that the US "has monopoly positions much stronger and more far-reaching than China’s," and vowed to "financially counter their move."
Among the measures under consideration are new export controls on aircraft parts, and restrictions on US software and technology sales to Chinese firms — a move that could severely impact China’s AI and cloud computing industries.
Markets react: global selloff and investor panic
Trump’s tariff threat sent tremors through global financial markets. The S&P 500 Index plunged over 2.7%, its steepest one-day drop since April, while tech-heavy Nasdaq stocks also slumped amid fears of escalating US-China tensions.
Gold prices spiked as investors sought safe havens, and the US dollar weakened against major currencies. Experts say the latest escalation could mark a decisive shift in the trade dynamic between Washington and Beijing.
"Today’s sharp sell-off reflects renewed fears that the US is escalating trade tensions with China, particularly the threat of a large hike in tariffs and the cancellation of the meeting with President Xi. These moves inject real risk into global supply chains, corporate margins, and investor sentiment," Anshul Sharma, chief investment officer at Savvy Wealth, New York told Reuters.
"We think this is less about valuations and more about sentiment. Fundamentally, corporate earnings and balance sheets remain healthy, but when policy uncertainty spikes, as it did with today’s tariff headlines, investors tend to de-risk quickly. In our view, this is a sentiment-driven pullback within an otherwise resilient market backdrop," Sharma added.
Sharma further warned that if tensions persist and begin affecting corporate earnings, "the market could see a more drawn-out adjustment."
"Trump's post could mark the beginning of the end of the tariff truce," Craig Singleton, senior fellow at the Foundation for Defense of Democracies. told the agency. "Beijing appears to have overplayed its hand, and Washington is responding with maximum pressure."
Mike Brown, senior strategist at Pepperstone, London, called Trump’s move "a bolt from the blue." "It’s a bolt from the blue from Trump and after the rare earth news earlier ... the timing is a big surprise. The key thing market participants will be focused on as we move into the weekend and next week, is: are we now looking at having to tear up the assumptions we did have that trade was a done deal and now look at a re-escalation of tensions between the two," Brown said.
Both sides were expected to discuss trade, technology, and investment cooperation during the APEC summit beginning October 31 in South Korea. Now, with the latest developments, those talks are in jeopardy.
What's next & why it matters
Just months ago, the US and China had paused their trade hostilities following rounds of diplomatic engagement. But with Trump’s latest announcement, experts fear a return to the tariff battles that rocked global trade during his previous term.
Beijing has not yet announced retaliatory measures against the new US tariffs, but state media has called Washington’s actions "reckless" and "provocative." The Chinese foreign ministry, when asked for comment, said only that “dialogue must be based on mutual respect, not threats.”
With the world’s two largest economies once again on a collision course, analysts warn that the global supply chain — already strained by inflation and geopolitical conflict — could face fresh turbulence.
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