Trump threatens 100% China tariffs as Beijing restricts rare-earth exports

Donald Trump has accused Beijing of taking “very hostile” actions to limit exports of rare earths required for American industry, and he has threatened to put further 100% US tariffs on China starting next month.

After the US president rekindled public hostilities with the Chinese government and increased the likelihood of another bitter trade war between the two biggest economies in the world, Wall Street plummeted.

Washington and Beijing’s relations had improved throughout the summer, and after talks between the two nations, Trump agreed to significantly lower the high tariffs he had imposed on China earlier this year.

However, the Trump vowed to retaliate late Friday by levying a 100% charge on Chinese imports “over and above” any current duties. He stated that this will take place on November 1st “or sooner,” implying that if Chinese officials decide to respond, the action might be expedited.  Additionally, he said, the US will impose export restrictions on “any and all critical software.”

“I never thought it would come to this but perhaps, as with all things, the time has come,” Trump wrote on his Truth Social website, claiming: “Ultimately, though potentially painful, it will be a very good thing, in the end, for the U.S.A.

“One of the Policies that we are calculating at this moment is a massive increase of tarriffs on Chinese products coming into the United States of America. There are many other countermeasures that are, likewise, under serious consideration.”

Amid escalating tensions between the two nations, Trump raised US tariffs on Chinese imports several times in the spring, reaching a high of 145%.  In retaliation, Beijing increased its own export duties to 125%.

However, a tenuous detente resulted from discussions between authorities amid general apprehension about the effects of such high taxes on the global economy.  Chinese taxes on US imports decreased to 10%, while US duties on Chinese goods decreased to 30%. Investors were concerned on Friday by the president’s most recent internet assault on Beijing.  The technology-focused Nasdaq Composite lost 3.6%, the Dow Jones industrial average in New York slid 1.9%, and the benchmark S&P 500 fell 2.7%, its worst day since April.

Pressure was also applied to other major international markets. In London, the FTSE 100 fell 0.9%.

Over 90% of processed rare earths and rare-earth magnets worldwide are produced in China, making it the world’s greatest producer of rare earths. For producers of everything from electric vehicles to aircraft engines, the 17 components are essential.

Beijing considerably increased its export restrictions on rare earths earlier this week, adding five new substances to its list of prohibited minerals. Prior to a number of diplomatic agreements helping to ease some of the problems, its most recent expansion of controls, back in April, caused supply shortages worldwide.