President Donald Trump has warned he could impose 100% tariffs on Chinese goods as soon as 1 November, accusing Beijing of “very hostile” actions after it expanded export restrictions on rare earth materials.
The move reignites fears of a new trade war between the world’s two largest economies and sent global markets tumbling. The S&P 500 dropped 2.7%, the Dow Jones fell 1.9%, and the Nasdaq sank 3.6%.
“I never thought it would come to this,” Trump wrote on Truth Social. “Ultimately, though painful, it will be a very good thing for the U.S.A.”
He also announced plans for new export controls on “any and all critical software,” hinting at further economic measures against China.
Relations between Washington and Beijing had improved earlier this year after both sides agreed to reduce steep tariffs. Trump had praised the talks as “excellent,” but Friday’s threat reversed months of diplomacy.
China, which produces over 90% of the world’s processed rare earths, recently tightened controls on five additional materials critical for electric vehicles and aerospace manufacturing.
“I have always felt they were lying in wait,” Trump said, calling China’s dominance in rare earths “a sinister and hostile move.”
A planned meeting with Chinese president Xi Jinping in South Korea later this month now appears unlikely.
Analysts warned that Trump’s tariff threats could raise costs for U.S. manufacturers and consumers. Despite his claims that tariffs strengthen the economy, economists say they often fuel inflation and disrupt supply chains.
