President Donald Trump on Friday said he would impose a 100% tariff on all products from China in response to curbs Beijing announced this week on rare-earth minerals, a rapid escalation of tensions between the world’s largest economies.
On Truth Social, Trump wrote that the tariffs would take effect Nov. 1 and be imposed “over and above” other tariffs on Chinese exports, which are already 30% and in some cases much higher. The United States would also put export controls on critical software, he said.
In an earlier post Friday, the president threatened to retaliate and cancel a planned meeting with China’s leader, Xi Jinping.
Trump called the curbs that China put out this week on its exports of rare-earth minerals “sinister and hostile” and said they would “make life difficult for virtually every Country in the World.” He added that he had planned to meet Xi in two weeks at an international economic conference in South Korea, “but now there seems to be no reason to do so.”
“One of the Policies that we are calculating at this moment is a massive increase of Tariffs on Chinese products coming into the United States of America,” he wrote. “There are many other countermeasures that are, likewise, under serious consideration.”
Markets shuddered at the developments — the S&P 500 index sliding more than 2% Friday.
Speaking Friday evening, the president suggested that the tariffs could be walked back before the Nov. 1 deadline and that he would not necessarily cancel his planned meeting with Xi.
“We’ll see what happens,” Trump said. He called China’s move “very, very bad.”
Rare-earth minerals, which are vital for making an array of products including motors, brakes, semiconductors and fighter jets, have been at the center of tensions between the United States and China this year. Trump has also placed extreme tariffs on Chinese exports before, only to walk them back after they restricted trade and hurt companies in both countries.
In April, the Chinese government responded to the stiff tariffs Trump imposed on Chinese goods by clamping down on mineral exports destined for U.S. automakers and defense manufacturers.
The Trump administration tried to encourage China to back down by imposing its own restrictions on exports of chip design software, airplane engines and other products. U.S. tariffs on Chinese products rose to a minimum of 145%, bringing much trade between the countries to a halt and raising concerns about empty American store shelves.
China’s mineral curbs threatened to close U.S. factories and forced the United States, which depends on Chinese supplies, to pull back. Ultimately, officials from both countries reached a fragile truce in meetings this spring that led to Trump’s reducing his tariffs and Beijing’s approving more mineral exports.
On Thursday, Beijing again escalated its controls, asserting broader jurisdiction over the global manufacture of semiconductors and other technology.
The Chinese government said it would require companies anywhere in the world to obtain licenses if they are exporting products containing even a minimal amount of Chinese-produced rare earths, including for chip manufacturing. Those exports would also be controlled if the minerals were produced using Chinese mining, processing or magnet-making technologies.
Companies with any affiliation to foreign militaries would be largely denied those licenses, it said.
The Chinese government also put new controls on equipment needed to manufacture batteries for electric cars.
The global nature of the Chinese restrictions mirror those that the United States has put on semiconductors, which dictate that any company using American chip technology anywhere in the world must follow U.S. guidelines.
China has responded to those restrictions by developing its own framework to regulate industries that it dominates. China mines 70% of the world’s rare earths and performs the chemical processing for roughly 90% of the global supply of the minerals.
The new restrictions have caused significant anxiety among U.S. companies. Analysts said the new limits could scramble the supply chains of some of the world’s biggest companies, including Nvidia and Apple.
Tech stocks were particularly hard hit Friday, with Nvidia down almost 5%, Advanced Micro Devices falling almost 8% and the broader semiconductor sector sliding over 5%.
On Friday, China also announced an anti-monopoly investigation into the American chipmaker Qualcomm and new fees for U.S. ships docking at Chinese ports.
Analysts had speculated that China’s mineral restrictions could be an effort to amass leverage before the meeting between Trump and Xi.
If so, it could backfire. In addition to the president’s calls for retaliation, other critics of China said the measures highlighted the need for the United States to reduce its exposure to the Chinese economy. The Chinese government has set out ambitious plans in recent decades to dominate various industries, including steel, shipbuilding, robotics, rare earths and biomedicine.
Rep. John Moolenaar, R-Mich., the chair of the House Select Committee on China, called Beijing’s action “an economic declaration of war against the United States and a slap in the face to President Trump amid his efforts to fight for a level playing field.”
Moolenaar said the United States should immediately pass legislation to end preferential trade treatment for China, build the U.S. supply of minerals and “strangle China’s technology sector with export controls instead of selling it advanced chips.”
Wendy Cutler, a senior vice president at the think tank Asia Society Policy Institute, said the president’s statements showed “how fragile the emerging detente between the two countries really is.”
“Beijing has become increasingly assertive, believing it has the upper hand in the bilateral relationship,” she said. But Trump’s counterthreats showed that “two can play this game.”
With the planned summit between the leaders in just over two weeks, it was unclear whether the two sides would be willing to de-escalate to hold the meeting, Cutler added.
In his social media post, Trump said that China’s policies “came out of nowhere.” The U.S. relationship with China over the past six months had been a very good one, he said.
Trump said that although China had a monopoly on rare-earth minerals, the United States had other monopolies that were “stronger and more far reaching.” He added, “I have just not chosen to use them, there was never a reason for me to do so — UNTIL NOW!”
The White House has been planning for Trump to travel to Asia later this month, where he would meet Xi on the sidelines of the Asia-Pacific Economic Cooperation meeting in South Korea.
The plans had generated speculation about whether the meeting could lead to an economic deal between the countries, potentially including Chinese purchases of American products or Chinese investment in the United States.
Beijing has also been interested in having the United States roll back the global controls it has put on China’s access to advanced artificial-intelligence chips.
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