The move comes in response to China’s tightened export controls on rare earth minerals, which Trump said on Truth Social would “create difficulties for almost every country in the world.” He also mentioned plans to impose export controls on software.
On October 9, China added holmium, erbium, thulium, europium, and ytterbium to its list of restricted minerals. Under the new rules, foreign companies using Chinese minerals or technology must obtain a license, which China will deny to firms linked to any foreign military.
Trump Says No Immediate Reason to Meet Xi
Following China’s announcement, Trump stated that many countries expressed dissatisfaction with China’s trade restrictions, and he currently sees no reason to meet Xi Jinping at the APEC summit. However, he clarified that the meeting has not been cancelled, leaving the possibility open.
Potential Impact
On US-China Relations:
The announcement, coming after market closure on Friday, could destabilize the global economy. Adding a 100% tariff on top of the existing 30% tax may reignite the US-China trade war and strain bilateral trade.
The tariff conflict began when Trump imposed a 145% tariff on Chinese goods, prompting China to respond with a 125% import tax on American products, effectively blocking trade. Subsequent negotiations reduced tariffs to 30% for the US and 10% for China, temporarily easing tensions. Trump’s latest announcement threatens to end this relief, raising doubts about diplomatic resolutions.
On US Stock Markets:
Global investors reacted negatively. Nearly six out of seven stocks in the S&P 500 fell, including tech giants like NVIDIA and Apple.
- S&P 500: down 2.7%
- Dow Jones Industrial Average: down 878 points (1.9%)
- Nasdaq Composite: down 3.6%
Timeline of Trump’s Tariff Measures
- March 5, 2025: Trump announced tariffs on countries worldwide in Congress, citing trade deficits.
- April 2, 2025: Tariffs announced on 69 countries, including India, initially set for April 9, but implementation was postponed to allow negotiations.
- July 31, 2025: Deadline for deals expired. Trump imposed tariffs on over 100 countries—10–20% for those that reached agreements, 25–50% for those that did not.
Trump’s latest tariff move signals a major escalation in US-China trade tensions, with potential implications for the global economy and financial markets.
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