US President Donald Trump has stated he intends to impose an additional 100% tariff on imports from China starting next month. This announcement was made via social media, where he also indicated that export controls would be placed on critical software.
Trump's threats come in the wake of China's recent decision to tighten its export rules on rare earths, which he termed as China becoming very hostile and attempting to hold the global economy captive. In response, Trump hinted at potentially canceling an upcoming meeting with China's President Xi Jinping, although he later clarified he had not done so yet.
I'm going to be there regardless, Trump told reporters at the White House. Following his remarks, financial markets saw a significant decline, with the S&P 500 experiencing its largest drop since April, down 2.7%.
The significance of rare earths cannot be understated, as China holds a dominant position in their production—vital for many high-tech products including smartphones and electric cars. The last tightening of China's export rules led to major production halts in the US, showcasing the intricate ties and dependencies within US-China trade relations.
In addition to the proposed tariff, China has initiated a monopoly investigation into Qualcomm, a US tech firm, jeopardizing its acquisition of another chipmaker. Beijing has also introduced new port fees for ships with US connections.
“Some very strange things are happening in China!” Trump remarked. The ongoing situation has resulted in a fragile ceasefire in the US-China trade conflict, yet escalatory actions on both sides suggest an impending reevaluation of trade positions.
Experts interpret Xi’s recent maneuvers as strategic, aimed at shifting the dynamics of the forthcoming discussions. With new rules set to take effect in December, analysts predict that negotiations may resume soon, despite the increasing tensions.
