China warns US of retaliation over Trump’s 100% tariffs threat | Trump tariffs

Beijing has told the US it will retaliate if Donald Trump does not back down on his threat to impose 100% tariffs on Chinese imports, as investors brace for fresh trade war turmoil.

China’s Ministry of Commerce accused Washington of increasing trade tensions between the two countries after Trump announced on Friday that he would impose additional tariffs on Chinese exports to the United States and new controls on critical software by November 1.

“Deliberate threats of high tariffs are not the right way to get along with China,” a commerce ministry spokesman said on Sunday, according to state news agency Xinhua. “China’s stance on the trade war is consistent. We do not want it, but we are not afraid of it.”

“If the United States insists on going the wrong way, China will definitely take decisive measures to protect its legitimate rights and interests.”

The US president shocked financial markets on Friday by accusing China of taking “very hostile” moves to restrict exports of rare earth materials needed by US industry.

This caused heavy falls on Wall Street, wiping around $2 trillion (£1.5 trillion) from the value of US stocks.

China insisted on Sunday that its latest export controls on rare earth elements such as holmium, erbium, thulium, europium and ytterbium were legitimate.

“China’s export controls are not export bans,” a commerce ministry spokesman said. “All compatible export applications for civilian use can receive approval, so interested businesses need not worry.”

The measures were implemented after Washington added a number of Chinese firms to its export control list in a crackdown on the use of foreign subsidiaries to bypass export restrictions on chipmaking equipment and other goods and technologies.

Britain’s FTSE 100 share index fell almost 1% on Friday as Trump’s threat sparked a late sell-off. The futures market suggests further losses are likely in London and New York on Monday, but it may also be a relief that Beijing has not yet retaliated.

Bitcoin, which lost 8 percent in value after Trump’s post on Truth Social, rose 1.5 percent on Sunday after China refrained from retaliating.

Michael Brown, senior research strategist at brokerage Pepperstone, said Trump’s tariff threat was “a highly unwelcome development for financial markets” as investors “moved away from the trade and tariff story in general.”

“The question that every man and his dog is really trying to answer is whether this is a credible threat that the Trump admin can pursue, or whether this is just another example of the ‘de-escalation for the sake of de-escalation’ strategy that Trump used frequently earlier in the year.”

“A strategy in which outlandish and ridiculous tariff figures are threatened in order to focus minds, extract concessions from the other side, and ultimately reach an agreement faster than is possible.”