Trump Proposes 100% Tariff on China Over Rare Earth Mineral Restrictions

On Friday, President Donald Trump announced a sweeping plan for a 100% tariff on all imports from China, alongside new restrictions on exporting “any and all critical software” from the United States.

This declaration represents a notable escalation in the ongoing trade conflicts between the U.S. and China. Trump shared on Truth Social that the new tariff will be “in addition to” the current tariffs on Chinese goods, which, as reported by CNBC, currently have a baseline of 40%.

Earlier that week, China enacted tighter export controls on rare earth minerals, mandating that foreign companies obtain licenses to export even minimal quantities of materials. As the main supplier of these vital resources critical for technologies like semiconductors and solar energy, China’s regulations could significantly impact the tech sector.

In his address, Trump condemned 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 chosen this course, but they have, and the consequences will be substantial,” he stated.

Trump announced that the new tariffs are scheduled to commence on November 1. Following his speech, he told reporters that these tariffs could be adjusted and hinted at a possible meeting with President Xi Jinping.

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, the S&P 500 falling by 2.71%, and the Nasdaq declining by 3.56%. Several tech companies experienced even steeper losses, including Nvidia and Tesla, which both saw around a 5% decrease by market close.

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