By Donald Judd, Kylie Atwood, CNN
US President Donald Trump and Chinese President Xi Jinping. Photo: AFP
President Donald Trump said Friday he would impose a 100 percent tariff on China "over and above any Tariff they are currently paying" effective November 1 - massively escalating his trade war amid a heated dispute over export controls on rare earths.
In a Truth Social post, Trump wrote that China had "taken an extraordinarily aggressive position on Trade in sending an extremely hostile letter to the World, stating that they were going to, effective November 1st, 2025, impose large scale Export Controls on virtually every product they make, and some not even made by them."
"This affects ALL Countries, without exception, and was obviously a plan devised by them years ago," he wrote. "It is absolutely unheard of in International Trade, and a moral disgrace in dealing with other Nations."
Trump said he would impose the new tariff November 1 "or sooner, depending on any further actions or changes taken by China."
Earlier in the day, Trump blasted Chinese leader Xi Jinping on social media over China's ramped-up efforts to impose export controls on critical rare earths, threatening economic retaliation and saying he no longer sees any reason to meet with Xi during a scheduled visit to the region later this month.
"Some very strange things are happening in China! They are becoming very hostile, and sending letters to Countries throughout the World, that they want to impose Export Controls on each and every element of production having to do with Rare Earths, and virtually anything else they can think of, even if it's not manufactured in China," Trump wrote in a post on Truth Social. "Nobody has ever seen anything like this but, essentially, it would 'clog' the Markets, and make life difficult for virtually every Country in the World, especially for China."
Trump also threatened economic penalties against China, warning, "Dependent on what China says about the hostile 'order' that they have just put out, I will be forced, as President of the United States of America, to financially counter their move."
"For every Element that they have been able to monopolize, we have two," he added.
Beijing ramped up sweeping restrictions on rare earth exports on Thursday, expanding the list of minerals under control and extending controls targeting their production technologies and their overseas use, including for military and semiconductor applications.
The move came as Beijing has sought to boost its leverage in trade talks with the United States and ahead of an expected meeting between Xi and Trump on the sidelines of the APEC summit in South Korea later this month.
CNN has reached out to the White House for clarity on if the president's meeting with Xi is officially cancelled.
"I have not spoken to President Xi because there was no reason to do so," Trump wrote. "This was a real surprise, not only to me, but to all the Leaders of the Free World. I was to meet President Xi in two weeks, at APEC, in South Korea, but now there seems to be no reason to do so."
White House officials viewed the move this week as a dramatic escalation that could threaten the meeting even before Trump took to social media to publicly make the threat, according to a senior administration official and a source familiar with the matter. But there are also private frustrations at the White House after the US Commerce Department expanded the number of Chinese firms on an export controls backlist late last month that could have frustrated China, sources said.
China had invited Trump to visit Beijing while he was on his trip to Asia later this month but without any clear deliverables the Trump administration turned down the invitation, according to the senior administration official. They had agreed to work toward a meeting on the sidelines of the economic summit.
Trump on Friday also slammed China for choosing to announce the steps Thursday, suggesting doing so minimised his attempts to secure a peace deal between Israel and Hamas.
"The Chinese letters were especially inappropriate in that this was the Day that, after three thousand years of bedlam and fighting, there is PEACE IN THE MIDDLE EAST," he wrote. "I wonder if that timing was coincidental?"
Currently, products from China are taxed at a minimum of 30 percent through November. Meanwhile, American exports to China are taxed at 10 percent. Earlier this year tariffs on both countries, the largest two economies, soared above 100 percent, essentially bringing trade to a halt.
Trump on Friday also slammed China for choosing to announce the steps on Thursday, suggesting doing so minimised his attempts to secure a peace deal between Israel and Hamas.
"The Chinese letters were especially inappropriate in that this was the Day that, after three thousand years of bedlam and fighting, there is PEACE IN THE MIDDLE EAST," he wrote. "I wonder if that timing was coincidental?"
A push on a critical resource
Trump's comments underscore the clear anxiety tied to Xi's hold over a market critical to the national security of the US and its Western allies.
Top Trump officials have convened technology and rare earth company executives in their push to accelerate development up and down the supply chain necessary for domestic production, officials said.
The message delivered - in meetings and rounds of phone calls throughout the summer - was centred on the urgent need to mollify the risks exposed by China's actions in the spring.
The administration's efforts included the announcement of a US$400 million equity stake in MP Materials Corp, the only US rare earth producer, and a government-backed price floor to bolster its operations.
But US officials have acknowledged that the overall effort will still take time and, as a result, leave the country and its allies vulnerable to Xi's strategic whims in the near term.
That reality has served as the basis for multiple rounds of US-China trade talks in recent months, and has been a central focus of Trump's approach to Xi in the lead up to their planned meeting.
China's dominance has long been a concern after the nation's hammer-lock on the market was laid bare during a 2010 maritime dispute with Japan.
But Trump's decision to threaten escalating trade war with the country, at the same time the US has actively sought to limit western technology critical to China's national and economic security, sparked Xi's most aggressive moves to leverage that market dominance to date.
"It was a real eye-opening moment for the entire world," a senior US official told CNN of China's actions in the spring. "A seismic-level geopolitical moment where everyone realized the scale of the vulnerability."
Stocks sink on fears of renewed trade war
Wall Street investors were taking Trump seriously in the wake of his initial threat of economic retaliation on Friday. Stocks sank after the president's morning social media post. The Dow fell 879 points, or 1.9 percent. The broader S&P 500 dropped 2.71 percent and the tech-heavy Nasdaq Composite slid 3.56 percent.
Tariff anxiety was at its highest in the spring when tit-for-tat tariffs pushed taxes on Chinese imports up to a minimum of 145 percent. Stocks nearly entered a bear market in April, and fears only started to ease up later that month when the Trump administration exempted smartphones and electronics from Chinese tariffs - a significant concession that represented the first sign of a potential breakthrough in what was an effective embargo on all Chinese goods in the US. In May, both China and the United States significantly reduced tariffs, and the markets have since risen to new record highs.
Although Trump eventually raised tariffs on dozens of countries' exports to the United States, tariffs on China had remained relatively low, keeping economic angst to a relative minimum.
That's why stocks are sinking Friday: The market had largely been ignoring Trump's tariffs, because China's trade dispute had effectively been a sleeping giant. Negotiations were slow-going but had managed to keep higher tariffs at bay. Now that the giant may have been woken up, investors are getting "Liberation Day" fears all over again. And for a reason: Trade with China is crucial for the US economy, particularly ahead of the holiday season (that's why Amazon and Target's stocks are sinking) and as AI heats up (tech stocks are among the hardest hit on Friday).
Tensions have been bubbling for many months: Both China and the US have recently tightened export controls on key exports, including rare-earths and AI chips. They've launched investigations into each country's major companies and imposed high port fees in recent months. The US threatened to block student visas and also imposed export controls for software tools, aerospace equipment and the sale of ethane, a major petroleum byproduct for China.
A US official said those options - and more - are now back on the table in line with Trump's social media warning posted on Friday morning.
- CNN
