Trump Proposes 100% Tariff in Response to China’s Limits on Rare Earth Minerals

On Friday, President Donald Trump unveiled his strategy to implement a significant 100% tariff on all imports from China while also imposing restrictions on the export of “any and all critical software” from the United States.

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

Earlier this week, China enforced stricter export controls on rare earth minerals, mandating that foreign firms obtain licenses for exporting products containing even minimal amounts. As the leading producer of these essential materials—critical for technologies like semiconductors and solar panels—China’s regulations could significantly impact the tech sector.

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

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

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

The stock markets reacted adversely to Trump’s announcement, with the Dow Jones Industrial Average falling by 1.9% by the close of trading on Friday, the S&P 500 dropping by 2.71%, and the Nasdaq declining by 3.56%. Numerous tech companies experienced even sharper declines, such as Nvidia and Tesla, each seeing about a 5% fall by market close.

Moreover, this situation had a negative impact on the cryptocurrency markets, with liquidations reported to be ten times greater than those seen during the FTX collapse.