Trump threatens 100% China tariffs as Beijing restricts rare-earth exports | Trump tariffs
Donald Trump has threatened to impose 100 percent additional tariffs on China starting next month, accusing Beijing of “very hostile” moves to restrict exports of rare earths needed for American industry.
Wall Street fell sharply after the US president reignited public tensions with the Chinese government and raised the possibility of a bitter new trade war between the world’s two largest economies.
Relations between Washington and Beijing improved over the summer, and Trump agreed to greatly reduce the high tariffs he imposed on China earlier this year after negotiations between the two countries.
But late Friday, the president threatened to raise those tariffs again, imposing a 100% tariff on goods from China “on top of” current tariffs. This will happen on November 1 “or sooner,” he said, implying that the move could be accelerated if Chinese officials choose to retaliate.
He added that the US would also impose export controls on “any critical software”.
“I never thought it would come to this, but maybe, as with all things, the time has come,” Trump said on the Truth Social website, claiming: “All in all, even though it will be potentially painful, it will end up being a very good thing for the United States.”
“One of the Policies we are currently considering is to greatly increase Tariffs on Chinese products coming into the United States. Likewise, there are many other countermeasures under serious consideration.”
Trump said “there doesn’t seem to be any reason” to meet with the Chinese President, suggesting that the meeting between Trump and Xi Jinping planned for later this month in South Korea may no longer take place.
The US president’s threat paves the way for a new escalation in the volatile dispute with China. He described US relations with this country as “excellent” after signing a tariff reduction agreement just four months ago.
Trump repeatedly increased US customs duties on Chinese goods, up to 145% in the spring, at a time when tensions between the two countries were increasing. Beijing responded by increasing its own tariffs on US exports to 125%.
But talks between officials have led to a fragile détente amid widespread concerns about the impact of such exorbitant taxes on the world economy. The customs duties imposed by the USA on Chinese products decreased to 30%, and the customs duties imposed by China on US products decreased to 10%.
The president’s latest online attack on Beijing alarmed investors on Friday. The benchmark S&P 500 index fell 2.7%, its worst day since April, and the Dow Jones industrial average fell 1.9% in New York, while the tech-focused Nasdaq Composite lost 3.6%.
Shares of tech giant Nvidia, the world’s largest publicly traded company with a market value of almost $2.5 trillion, were particularly hard hit, falling almost 5%.
Other leading global markets also came under pressure. The FTSE 100 fell 0.9 percent in London.
China is the world’s largest producer of rare earths, producing more than 90% of the world’s processed rare earths and rare earth magnets. The 17 elements are critical to manufacturers of everything from electric cars to aircraft engines.
Earlier this week, Beijing significantly expanded export controls on rare earths, adding five new materials to the control list. The last expansion of controls in April led to worldwide supply shortages before a series of diplomatic agreements helped resolve some of the problems.
“I always felt like they were lurking, and now I’m right as always!” Trump made the claim on Friday. “There is no way China will be allowed to hold the Earth ‘captive’, but that seems to have been their plan for a long time, starting with the ‘Magnets’ and other Elements that they have quietly accumulated in a sort of Monopoly position, which is a pretty sinister and hostile move to say the least.”
“But the United States also has Monopoly positions that are much stronger and more far-reaching than China’s.”
Trump’s aggressive tariff strategy is a central pillar of his policy agenda. He claimed that higher taxes on imports from around the world would strengthen the U.S. economy and save the federal government trillions of dollars.
However, tariffs are often passed on to consumers, causing prices to increase. After years of high inflation, Trump has repeatedly claimed that such inflation does not exist in the United States. In reality, price increases are increasing.
