Trump ratchets up U.S.-China trade war, promising new tariffs

U.S. President Donald Trump reignited the trade conflict with Beijing on Friday, ending a fragile truce between the world’s two largest economies by announcing a sharp rise in tariffs in retaliation for China’s decision to restrict critical mineral exports.

The president unveiled fresh 100% duties on Chinese exports to the United States, along with new export controls on “any and all critical software” to take effect by 1 November — nine days before current tariff exemptions are due to expire.

Trump also cast doubt on the prospects of a previously announced meeting with Chinese President Xi Jinping in South Korea, scheduled for three weeks’ time, writing on Truth Social that “now there seems to be no reason to do so.”

“I haven’t cancelled,” he later told reporters at the White House. “I would assume we might have it.” Beijing has not confirmed the meeting.

The new trade measures followed China’s decision to significantly expand its export controls on rare earth elements — crucial materials for modern technology production.

“It was shocking,” Trump said of Beijing’s move, which did not explicitly target Washington. “I thought it was very, very bad.”

The actions marked the most severe deterioration in relations between the two powers in six months — between the world’s largest manufacturer and its biggest consumer. Observers questioned whether the fragile economic détente achieved over the summer could survive.

Trump’s rapid escalation underscored his readiness to use tariffs — effectively paid by U.S. importers — against both allies and rivals. Analysts warned it could reignite a full-blown trade war, one that had only recently been paused following months of diplomacy.

Experts added that restricting U.S. software exports to China could deal a major blow to its technology sector, particularly in areas such as cloud computing and artificial intelligence.

Trump also threatened further export controls on aircraft and aircraft components, while a source familiar with the situation said the administration was mapping out additional targets.

Beijing has repeatedly called on Washington to lift unilateral trade restrictions, arguing they distort global commerce.

Markets tumble on new threats

Trump’s statements — delivered through social media posts and exchanges with journalists — sent shockwaves through financial markets and deepened uncertainty between the two economic superpowers.

China produces more than 90% of the world’s processed rare earths and magnets, vital for manufacturing electric vehicles, aircraft engines, and military radar systems.

The president’s surprise announcement rattled investors, sending the benchmark S&P 500 Index down by over 2% — its sharpest one-day fall since April, when a series of tariff threats from Trump triggered heavy market volatility.

Traders sought safety in gold and U.S. Treasury bonds, while the U.S. dollar weakened against a basket of major currencies. Technology shares suffered steep losses in after-hours trading following Trump’s unveiling of the new tariffs and export restrictions.

“Trump’s post could mark the beginning of the end of the tariff truce,” said Craig Singleton, a China specialist at the Foundation for Defence of Democracies. He added that Washington viewed Beijing’s export controls as a betrayal: “Beijing appears to have overplayed its hand.”

In his first post on Friday, Trump claimed China had been sending letters to countries worldwide declaring its intention to impose export restrictions on all rare earth-related materials — apparently referring to official policy documents.

He said several nations had contacted him expressing outrage at Beijing’s actions, adding that he was surprised given the “very good” recent relations between the two countries.

Trump condemns Beijing’s “hostile order”

Calling China’s decision a “hostile order”, Trump said he had been compelled “to financially counter their move.”

“For every element they’ve managed to monopolise, we have two,” he declared.

The White House and the Chinese embassy in Washington declined to comment. A spokesperson for the U.S. Trade Representative’s office would not discuss possible countermeasures, and the U.S. Treasury Department offered no response. Both agencies have been leading Washington’s trade negotiations with Beijing.

Economic frictions had been building in recent days. On Thursday, the Trump administration proposed banning Chinese airlines from flying over Russia on U.S.-bound routes. The following day, the U.S. Federal Communications Commission said major American online retailers had removed millions of listings for banned Chinese electronic products.

China’s latest move included adding five new rare earth elements and dozens of refining technologies to its export control list. It also required foreign companies using Chinese raw materials to comply with its domestic regulations.

Analysts said the stakes for a positive outcome at the planned Trump–Xi summit — if it proceeds — have now increased dramatically. The meeting is expected to take place on the sidelines of the Asia-Pacific Economic Cooperation (APEC) forum in South Korea, beginning on 31 October.

“Things are going to get interesting,” said Scott Kennedy, a China business and economics expert at Washington’s Centre for Strategic and International Studies.

“Both sides appear to believe that by ramping up pressure they can force the other to make concessions ahead of APEC — or they may have concluded a deal is no longer possible and are seeking to gain leverage for the next round of confrontation.”

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