Trump Responds to China’s Rare Earth Mineral Restrictions with 100% Tariff Threat

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

This move signifies a major escalation in the prolonged trade conflict between the U.S. and China. In a post on Truth Social outlining the tariffs, Trump highlighted that this new levy would be “in addition to” the tariffs already imposed on Chinese imports. (According to CNBC, while the tariff rates on Chinese goods differ, the baseline rate is currently set at 40%.)

Earlier this week, China enacted stricter export controls on rare earth minerals, requiring foreign companies to obtain a license to export products containing even trace amounts. As the foremost producer of these essential materials—critical for technologies such as semiconductors and solar panels—China’s regulations could significantly impact the tech industry.

In his remarks, Trump described China’s actions as “entirely unprecedented in International Trade, and a moral disgrace when interacting with other Nations.”

“It’s difficult to comprehend why China would choose this path, but they have, and the repercussions will be historic,” he remarked.

Trump announced that the new tariffs are scheduled to take effect on November 1. Following his announcement, he told reporters that these tariffs might be reassessed and that he could still go ahead with an upcoming meeting with President Xi Jinping.

In response to Trump’s announcement, the markets experienced a downturn, with the Dow Jones Industrial Average dropping by 1.9% by Friday’s close, the S&P 500 falling 2.71%, and the Nasdaq decreasing by 3.56%. Several tech companies endured even steeper declines, with Nvidia and Tesla both seeing drops of approximately 5% at market close.

Furthermore, this development adversely affected the cryptocurrency markets, causing liquidations that were reportedly ten times the dollar value seen during the FTX collapse.