Trump Threatens 100% Tariffs on China, Reigniting Trade War Fears
President Trump has accused China of “very hostile” actions and is threatening to impose new 100% tariffs on Chinese goods, possibly as early as November 1.
Donald Trump has threatened to hit China with additional 100% tariffs starting next month. He accused Beijing of making “very hostile” moves by restricting exports of rare earths, which are crucial for U.S. industries.
The announcement caused Wall Street to fall sharply, renewing fears of another major trade war between the world’s two largest economies.
This marks a reversal from the summer when relations between Washington and Beijing had improved. After negotiations, Trump had agreed to significantly lower the steep tariffs he imposed on China earlier this year.
However, on Friday, the president threatened to bring them back up by imposing a 100% tariff on Chinese goods “over and above” any existing tariffs. He said this could happen on November 1 “or sooner,” hinting the date could be moved up if China retaliates.
He also added that the U.S. will introduce export controls 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 platform. He claimed, “Ultimately, though potentially painful, it will be a very good thing, in the end, for the U.S.A.”
He added, “One of the Policies that we are calculating at this moment is a massive increase of Tariffs on Chinese products coming into the United States of America. There are many other countermeasures that are, likewise, under serious consideration.”
Trump also suggested a planned meeting with Chinese President Xi Jinping in South Korea later this month might be canceled, stating “there seems to be no reason” to meet.
The president’s new threat escalates his volatile dispute with China. Just four months ago, he described U.S. relations with the country as “excellent” after approving a tariff reduction deal.
In the spring, Trump had repeatedly increased U.S. tariffs on Chinese goods to a peak of 145% amid rising tensions. Beijing responded by raising its own tariffs on U.S. exports to 125%.
Talks between officials led to a temporary truce, with U.S. tariffs dropping to 30% and Chinese tariffs on U.S. goods falling to 10%.
The president’s latest comments alarmed investors on Friday. The S&P 500 fell 2.7% in its worst day since April, the Dow Jones industrial average dropped 1.9%, and the tech-focused Nasdaq Composite sank 3.6%.
Shares in tech giant Nvidia, one of the world’s largest companies, were hit hard, falling nearly 5%. Other global markets, like London’s FTSE 100, also dropped.
The dispute focuses on rare earths. China is the world’s largest producer, supplying over 90% of these 17 elements, which are vital for manufacturing everything from electric cars to plane engines.
Earlier this week, Beijing expanded its export controls on rare earths. A similar expansion in April caused global supply shortages.
“I have always felt that they’ve been lying in wait, and now, as usual, I have been proven right!” Trump claimed. “There is no way that China should be allowed to hold the World ‘captive,’… a rather sinister and hostile move, to say the least.” He added, “But the U.S. has Monopoly positions also, much stronger and more far reaching than China’s.”
Trump’s aggressive tariff strategy is a key part of his policy. He argues that higher taxes on imports will strengthen the U.S. economy. However, these tariffs are often passed on to consumers through higher prices, contributing to inflation.