Donald Trump has threatened to impose 100% tariffs on Chinese imports from 1 November, accusing Beijing of “very hostile” actions over rare-earth export restrictions.
The move reignites trade tensions between the world’s two largest economies, sending Wall Street tumbling on Friday. The S&P 500 dropped 2.7%, the Dow Jones fell 1.9%, and the Nasdaq slid 3.6%, with tech giant Nvidia losing almost 5%.
China, which produces over 90% of the world’s processed rare earths, recently expanded export controls to include five new materials critical for electronics and clean energy technology.
“I never thought it would come to this,” Trump said on Truth Social, claiming the tariffs would ultimately benefit the U.S. economy despite “painful” short-term effects.
The president also announced plans to restrict exports of “critical software” and hinted that his planned meeting with Xi Jinping in South Korea may now be canceled.
Earlier this year, both nations had eased their tariff burdens after striking a temporary truce. U.S. duties dropped from 145% to 30%, while China cut its tariffs from 125% to 10%.
Trump’s latest threat, however, could end that fragile peace. “China has been lying in wait,” he said. “They want to hold the world captive with their monopoly on magnets and other elements.”
Economists warn that renewed tariffs could fuel inflation, despite Trump’s repeated claims that price growth in the U.S. has already been eliminated.
