Trump Proposes 100% Tariff Following China’s Limits on Rare Earth Minerals

On Friday, President Donald Trump revealed his intention to impose a hefty 100% tariff on all imports from China, while also restricting the export of “any and all critical software” from the U.S.

This announcement signifies a significant escalation in the ongoing trade tensions between the U.S. and China. Trump mentioned on Truth Social that this new tariff would be “in addition to” existing tariffs on Chinese goods. (As noted by CNBC, current tariff rates on imports from China vary, with the baseline rate at 40%.)

Earlier in the week, China implemented more rigorous export controls on rare earth minerals, mandating that foreign companies secure licenses to export products containing even trace amounts. As the leading global producer of these essential materials—crucial for technologies like semiconductors and solar panels—China’s new regulations may significantly affect the tech industry.

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

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

Trump announced that the new tariffs are expected to take effect on November 1. Following his address, he informed reporters that these tariffs could be subject to adjustments and that he might still participate in an upcoming meeting with President Xi Jinping.

The stock markets reacted negatively to Trump’s announcement, with the Dow Jones Industrial Average dropping by 1.9% by the close of trading on Friday, the S&P 500 falling by 2.71%, and the Nasdaq decreasing by 3.56%. Some tech companies suffered even larger losses, like Nvidia and Tesla, both experiencing declines of around 5% at market close.

Moreover, this scenario negatively impacted the cryptocurrency markets, with liquidations reported to be ten times greater than those seen during the FTX collapse.