Trump Proposes 100% Tariff in Retaliation for China’s Rare Earth Mineral Restrictions

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

This declaration marks a significant escalation in the ongoing trade conflict between the U.S. and China. In a statement on Truth Social about the tariffs, Trump mentioned that this new duty would be “in addition to” the tariffs currently imposed on Chinese goods. (According to CNBC, the existing tariff rates on Chinese imports fluctuate, with the baseline rate presently at 40%.)

Earlier this week, China implemented more stringent export controls on rare earth minerals, mandating that foreign companies obtain a license to export products containing even trace amounts. As the top producer of these vital materials—essential for technologies such as semiconductors and solar panels—China’s regulations could have a substantial effect on the tech industry.

In his remarks, 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 opted for this path, but they have, and the repercussions will be significant,” he stated.

Trump announced that the new tariffs are expected to be implemented on November 1. Following his speech, he informed reporters that these tariffs could be reviewed and that he might still attend 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 Friday’s close, the S&P 500 falling by 2.71%, and the Nasdaq decreasing by 3.56%. Many tech companies faced even sharper declines, with Nvidia and Tesla experiencing drops of around 5% at market close.

Furthermore, this development negatively impacted the cryptocurrency markets, leading to liquidations reported to be ten times the amounts seen during the FTX collapse.