U.S. President Donald Trump has reignited trade tensions with China, announcing sweeping new tariffs and export controls in response to Beijing’s recent curbs on critical mineral exports. The move marks the end of a fragile truce between the world’s two largest economies and threatens to reopen a full-scale trade war.
Speaking from the White House on Thursday, Mr. Trump unveiled plans to impose a 100% levy on all Chinese exports to the U.S., coupled with strict new restrictions on American software sales to China. The measures are set to take effect on November 1 — just days before existing tariff relief arrangements are due to expire.
“This was shocking,” Mr. Trump said, referring to China’s decision to expand export controls on rare earth elements — a category of materials vital to industries from electronics to defense manufacturing. “I thought it was very, very bad,” he added.
The escalation comes amid uncertainty over a previously announced meeting between Mr. Trump and Chinese President Xi Jinping, which had been scheduled to take place in South Korea later this month. “Now there seems to be no reason to do so,” Mr. Trump wrote on his Truth Social account, though he later told reporters he had not officially cancelled the talks. Beijing has not confirmed the meeting.
China dominates global production of rare earth materials, processing more than 90% of the world’s supply. These minerals are critical to manufacturing electric vehicles, wind turbines, smartphones, and military equipment. Washington’s decision to retaliate with tariffs and technology export bans could have far-reaching implications for global supply chains and the technology sector.
Analysts warned that restricting U.S. software exports to China could deliver a major blow to Chinese firms reliant on American cloud computing and digital infrastructure. Mr. Trump also hinted at potential export controls on aircraft and aircraft parts, raising the prospect of further escalation.
Financial markets reacted sharply to the announcement. The benchmark S&P 500 Index fell more than 2% — its steepest drop since April — while tech stocks led losses in after-hours trading. Investors flocked to safe-haven assets such as gold and U.S. Treasury bonds, and the dollar weakened against major currencies.
“Trump’s post could mark the beginning of the end of the tariff truce,” said Craig Singleton, a China analyst at the Foundation for Defense of Democracies. “Beijing appears to have overplayed its hand, and Washington is striking back.”
The new measures underscore the volatility of U.S.-China relations, which had stabilized somewhat after months of tense negotiations earlier this year. With both sides now hardening their stances, economists warn that a renewed trade war could disrupt global markets and derail the fragile recovery in international trade.
