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

On Friday, President Donald Trump declared his plan to implement a substantial 100% tariff on all imports from China and to limit the export of “any and all critical software” from the United States.

This declaration represents a significant intensification in the ongoing trade disputes between the U.S. and China. Trump shared on Truth Social that this forthcoming tariff would be “in addition to” the current tariffs on Chinese products. (As reported by CNBC, existing tariffs on Chinese imports can vary, with a base rate set at 40%.)

Earlier this week, China introduced more stringent export controls on rare earth minerals, mandating that foreign companies secure licenses to export products containing even minimal amounts. Being the leading producer of these essential materials, which are crucial for technologies such as semiconductors and solar panels, China’s regulations could significantly impact the tech sector.

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

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

Trump disclosed that the new tariffs are expected to take effect on November 1. Following his address, he informed reporters that these tariffs could be modified and hinted at attending an upcoming meeting with President Xi Jinping.

The financial markets reacted negatively to Trump’s announcement, with the Dow Jones Industrial Average dropping by 1.9% by the end of Friday’s trading session, the S&P 500 declining by 2.71%, and the Nasdaq falling by 3.56%. Several technology firms experienced even greater losses, including Nvidia and Tesla, both of which saw approximately a 5% dip by market close.

Additionally, this scenario negatively impacted the cryptocurrency markets, with liquidations reported to be ten times higher than those observed during the FTX collapse.