Trump Warns of 100% Tariff Due to China’s Rare Earth Mineral Restrictions

On Friday, President Donald Trump announced his intention to impose a 100% tariff on all imports from China, along with restrictions on the export of “any and all critical software” from the United States.

This decision marks a substantial intensification in the ongoing trade conflict between the U.S. and China. In a message on Truth Social outlining the tariffs, Trump pointed out that this new tariff would be “in addition to” the existing tariffs on Chinese goods. (According to CNBC, while the tariffs on Chinese imports vary, the baseline rate currently stands at 40%.)

Earlier this week, China introduced stricter export controls on rare earth minerals, requiring foreign companies to obtain a license to export products containing even minimal quantities. As the primary producer of these essential materials—critical for technologies like semiconductors and solar panels—China’s regulations could significantly impact the tech industry.

In his remarks, Trump described China’s actions as “completely unprecedented in International Trade, and a moral disgrace in dealings with other Nations.”

“It’s difficult to comprehend why China has chosen this path, but they have, and the repercussions will be monumental,” he stated.

Trump revealed that the new tariffs will take effect on November 1. Following his announcement, he told reporters that these tariffs might be subject to review and that he may still proceed with an upcoming meeting with President Xi Jinping.

In response to Trump’s announcement, the markets reacted negatively, with the Dow Jones Industrial Average declining by 1.9% by the end of Friday, the S&P 500 falling 2.71%, and the Nasdaq decreasing by 3.56%. Several technology companies faced steeper declines, with Nvidia and Tesla both experiencing drops of around 5% at market close.

Additionally, this situation had a detrimental effect on the cryptocurrency markets, resulting in liquidations that were reportedly ten times the dollar value observed during the FTX collapse.