US President Donald Trump on Friday threatened to impose a 100 per cent tariff on Chinese goods, “over and above any tariff that they are currently paying”, effective on November 1 or sooner.
In a social media post, Trump expressed frustration with new export controls placed on rare earth elements by China and said there seems to be no reason to meet with Chinese leader Xi Jinping as part of an upcoming trip to South Korea.
“Based on the fact that China has taken this unprecedented position, and speaking only for the U.S.A., and not other Nations who were similarly threatened, starting November 1st, 2025 (or sooner, depending on any further actions or changes taken by China), the United States of America will impose a Tariff of 100% on China, over and above any Tariff that they are currently paying,” Trump wrote on Truth Social.
The US will also impose export controls on all critical software from November 1, he added.
While talking to reporters later during an Oval Office appearance, Trump clarified that he had not cancelled his meeting with Jinping. “But I don’t know that we’re going to have it. I’m going to be there regardless, so I would assume we might have it,” he said.
Trump’s threat to bring in a steep hike in tariffs was in response to the Chinese government’s decision to restrict access to rare earth minerals, requiring foreign companies to get special approval for shipping the metallic elements abroad.
Beijing had also announced permitting requirements on exports of technologies used in the mining, smelting and recycling of rare earths, adding that any export requests for products used in military goods would be rejected.
Trump said China has taken an “an extraordinarily aggressive position on trade” by sending “an extremely hostile letter to the world.”
“This (Beijing’s decision) affects all countries, without exception, and was obviously a plan devised by them years ago. It is absolutely unheard of in International Trade, and a moral disgrace in dealing with other nations,” the President said.
Trump’s new threat comes as a massive escalation in the global trade war, and its reflection was already visible in the market even in the initial hours. Dow fell by 878 points or 1.9 per cent while the S&P 500 was down 2.7 per cent. The tech-heavy Nasdaq tumbled 3.5 per cent.
Although Mexico has recently replaced China as the top source of foreign goods shipped to the US, America depends on China for hundreds of billions of dollars’ worth of goods, CNN reported, adding that China is one of the top export markets for America.
According to an Associated Press report, the new tariff tension could lead trade to break down between the US and China in ways that could cause growth worldwide to slump.
The prospect of tariffs this large could compound the president’s own political worries, potentially pushing up inflation at a moment when the job market appears fragile and the drags from a government shutdown are starting to compound with layoffs of federal workers, it said.