On Friday, President Donald Trump declared that he would implement a staggering 100% tariff on all imports from China, starting next month. This announcement followed earlier threats to cancel his scheduled meeting with Chinese President Xi Jinping, highlighting the escalating tensions between the two nations.
In a post on social media, Trump revealed that the new tariffs would take effect on November 1. He stated that this bold move was a direct response to what he described as China’s "extraordinarily aggressive position" on trade, particularly concerning export controls. "It has just been learned that China has taken an extraordinarily aggressive position on trade by sending an extremely hostile letter to the world, indicating they will impose large-scale export controls on virtually every product they manufacture, along with some products not even made by them," Trump said.
In addition to these tariffs, Trump announced that the U.S. would also impose export controls on all critical software, further intensifying the trade conflict. This announcement came shortly after Trump hinted at imposing tariffs, which triggered a significant stock market selloff. The Dow Jones Industrial Average plummeted by 385 points, or 0.8%, while the S&P 500 fell by 1.25%, and the tech-heavy Nasdaq dropped by 1.75%.
The backdrop to Trump’s harsh rhetoric is a recent move by China to impose new restrictions on rare-earth minerals, crucial materials in the production of semiconductors used in everything from artificial intelligence to household appliances. Earlier in the day, Trump accused China of sending threatening letters to nations worldwide, warning of impending export controls on all components related to rare earths. "There is no way that China should be allowed to hold the world 'captive,' but that seems to have been their plan for quite some time," he remarked.
In retaliation for these actions, Trump proposed a massive increase in tariffs on Chinese products entering the U.S., acknowledging that the move could be "potentially painful." Currently, tariffs on Chinese imports stand at 30%, a significant reduction from the peak of 145% earlier this year. Trump emphasized that the new tariffs on China would be in addition to any existing tariffs currently in place.
Earlier on the same day, Trump also hinted at the possibility of canceling his upcoming meeting with President Xi, which was scheduled to take place in two weeks at the APEC summit in South Korea. "This was a real surprise, not only to me but to all the leaders of the free world," Trump stated. "Now there seems to be no reason to do so," he added, reflecting the deteriorating relations between the U.S. and China.
This announcement comes at a time when the trade truce between the U.S. and China is still in effect but set to expire in less than a month. The ongoing tensions and potential repercussions of the tariffs could have significant implications for the global economy.
