President Donald Trump on Friday threatened to impose a 100% tariff on all Chinese imports starting November 1, 2025 — or sooner — escalating tensions between the world’s two largest economies. The move comes in response to Beijing’s sudden decision to tighten export controls on rare earth elements, which are critical to U.S. technology and defense industries.
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Trump expressed anger over China’s new export restrictions, calling them “shocking” and “out of the blue.” He questioned whether it was worthwhile to meet Chinese President Xi Jinping during his upcoming Asia trip, though he later clarified that the meeting hadn’t been formally canceled. “I’m going to be there regardless, so I would assume we might have it,” he told reporters.
The president also hinted that there may be time to step back from his tariff threat, saying, “We’re going to have to see what happens. That’s why I made it Nov. 1.”
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China Tightens Grip on Rare Earth Exports
Beijing’s new rules require foreign companies to seek special approval to ship rare earth minerals abroad and impose stricter licensing for technologies used in mining, smelting, and recycling. Exports tied to military products will be rejected outright.
The European Union Chamber of Commerce in China warned that the move adds “further complexity” to global rare earth supply chains, already strained by previous export control measures.
Markets React Sharply
The S&P 500 fell 2.7% — its worst day since April — on fears that a renewed trade war could trigger global economic disruption. Analysts warned that layering a 100% tariff on top of the existing 30% could severely damage trade flows and slow worldwide growth.
Some investors remain skeptical about the threat, noting Trump’s history of backing down from harsh measures — a pattern dubbed the “TACO” trade, short for “Trump Always Chickens Out.”
Strategic Leverage and Potential Fallout
China dominates 70% of global rare earth mining and 93% of permanent magnet production, giving it significant leverage. Gracelin Baskaran of CSIS said, “These restrictions undermine our ability to develop our industrial base at a time when we need to. It’s also a powerful negotiating tool.”
Craig Singleton of the Foundation for Defense of Democracies warned that Trump’s statement could “mark the beginning of the end of the tariff truce,” as both sides appear ready to use economic pressure simultaneously. “Mutually assured disruption between the two sides is no longer a metaphor,” he said.
Room for De-escalation
Despite the harsh rhetoric, analysts say there’s still space for compromise. Sun Yun of the Stimson Center noted that Beijing’s actions were a reaction to recent U.S. sanctions and new port fees but added that “de-escalation will have to be mutual.” Trump’s upcoming Asia trip, including potential talks with Xi in South Korea, could offer a diplomatic off-ramp.
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