Trump threatens 100% tariffs on China, signals Xi meeting cancellation over rare earth controls

President Trump announced Friday that he would impose an additional 100 percent tariff on Chinese imports beginning November 1st, or sooner if circumstances warrant, stacking the new levy on top of the 30 percent tariff already in place. The escalation came in response to China's decision to restrict exports of rare earth elements—metals essential to everything from computer chips and jet engines to military equipment and consumer electronics. In a separate post on his social media platform, Trump suggested there was little point in meeting with Chinese leader Xi Jinping during a planned trip to South Korea later in the month, effectively signaling the cancellation of a bilateral meeting scheduled for the Asia-Pacific Economic Cooperation summit.

The timing of Trump's announcement, released after financial markets closed on Friday, sent shockwaves through the global economy. The S&P 500 tumbled 2.7 percent on the news—the market's worst day since April, when Trump had previously threatened tariffs at similarly punitive levels. Investors began hedging against what some called the "TACO" trade, betting that Trump would ultimately back down from his threats, as he has done before. Yet the prospect of tariffs this severe carries real consequences: they could reignite the kind of trade war that earlier this year triggered fears of a global recession, potentially compounding inflation pressures at a moment when the American job market appears fragile and federal workers face layoffs from a government shutdown.

China's move on Thursday to restrict rare earth exports came ahead of the scheduled Trump-Xi meeting. Beijing announced it would require foreign companies to obtain special approval before shipping rare earth elements abroad and imposed new permitting requirements on technologies used in mining, smelting, and recycling those materials. Any export requests for products destined for military use would be rejected outright. Trump characterized the restrictions as "especially inappropriate" and suggested, without evidence, that the timing was designed to overshadow his role in brokering a ceasefire between Israel and Hamas. He said China was "becoming very hostile" and holding the world "captive" through its control of these critical materials.

The current tensions represent a fragile moment in what had been a monthslong calm between the world's two largest economies. Earlier this year, Trump had imposed tariffs totaling 145 percent on Chinese goods, prompting China to respond with 125 percent tariffs on American products—rates so extreme they effectively functioned as a blockade on bilateral trade. Negotiations in Switzerland and the United Kingdom had led both sides to reduce their tariff rates: the U.S. dropped to 30 percent and China to 10 percent, creating space for further talks. That détente now appears to be collapsing. Disputes remain unresolved over American access to rare earths, U.S. restrictions on Chinese imports of advanced computer chips, Chinese refusal to purchase American soybeans, and tit-for-tat port fees set to begin the following Tuesday.

China controls roughly 70 percent of rare earth mining globally and 93 percent of permanent magnet production from those elements—a dominance that gives Beijing substantial leverage in any negotiation. Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies, noted that these restrictions undermine America's ability to develop its industrial base at a time when strengthening domestic capacity is a priority, and they complicate efforts to bolster U.S. military capabilities amid global tensions. The European Union Chamber of Commerce in China warned that the new restrictions would add "further complexity to the global supply chain of rare earth elements," particularly given an existing backlog of export license applications from Beijing's previous controls.

Analysts offered competing interpretations of what comes next. Sun Yun, director of the China program at the Stimson Center, characterized Beijing's move as "disproportional" but suggested room for de-escalation remained, particularly if both sides showed willingness to negotiate on implementation. Cole McFaul, a research fellow at Georgetown University's Center for Security and Emerging Technology, suggested Trump's post signaled he was preparing for negotiations, perhaps believing China had overplayed its hand. From Beijing's perspective, however, McFaul noted that Chinese officials feel confident in their negotiating position, believing they have extracted key concessions in past talks. Craig Singleton, senior director of the China program at the Foundation for Defense of Democracies, warned that Trump's announcement could "mark the beginning of the end of the tariff truce," with both sides reaching for economic weapons simultaneously and neither appearing willing to step back.

Trump also said the U.S. government would impose its own export controls on "any and all critical software" from American firms in response to China's restrictions. Yet it remains unclear how the administration intends to implement its threats or how China will respond. The Chinese Embassy in Washington did not immediately comment on Trump's announcement. What is certain is that the fragility of the recent détente has been exposed, and the stakes of whether Trump and Xi meet—and how any future disputes between the two countries are resolved—have risen considerably.