WASHINGTON, Oct. 10 (Reuters) — U.S. President Donald Trump on Friday reignited the trade war with China, ending an uneasy truce between the world’s two largest economies by announcing sweeping new tariffs and export controls in retaliation for Beijing’s curbs on critical mineral exports.
Trump unveiled 100% tariffs on all China-bound exports to the U.S., along with new export controls on “any and all critical software” beginning November 1—just nine days before existing tariff relief is due to expire.
The president also cast doubt on a planned meeting with Chinese President Xi Jinping, previously scheduled for three weeks from now in South Korea. “Now there seems to be no reason to do so,” Trump wrote on Truth Social, though he later told reporters, “I haven’t canceled. I would assume we might have it.” Beijing has not confirmed the meeting.
The move followed China’s decision to expand export controls on rare earth elements, materials critical to global technology and defense industries. “It was shocking,” Trump said. “I thought it was very, very bad.”
The measures represent the most severe rupture in U.S.-China relations in six months and raise doubts over whether the fragile détente achieved during the summer can survive.
Trump, who has frequently wielded tariffs against both allies and rivals, responded swiftly and sharply—prompting concerns of another prolonged U.S.–China trade war.
Analysts warned that Washington’s new software export restrictions could deliver a heavy blow to China’s tech sector, especially in cloud computing and artificial intelligence. Trump also hinted at potential controls on airplanes and aircraft parts, and sources said additional targets are under consideration.
Beijing, meanwhile, has long urged Washington to lift unilateral trade barriers it says undermine global commerce.
Markets React Sharply
Trump’s latest threats, delivered across social media and in exchanges with reporters, rattled global financial markets and heightened tensions between the two superpowers.
China produces over 90% of the world’s processed rare earths and magnets, which are vital to products such as electric vehicles, aircraft engines, and military radars.
Following Trump’s announcement, the S&P 500 Index (.SPX) fell by more than 2%, marking its steepest one-day decline since April amid renewed trade uncertainty. Investors fled to safe havens including gold and U.S. Treasuries, while the U.S. dollar weakened against major currencies.
Technology stocks suffered the heaviest losses in after-hours trading as investors digested the prospect of tougher restrictions on China.
“Trump’s post could mark the beginning of the end of the tariff truce,” said Craig Singleton, a China analyst at the Foundation for Defense of Democracies. “Washington viewed Beijing’s export controls as a betrayal—China appears to have overplayed its hand.”
‘Hostile Order’ from Beijing
In his online posts, Trump accused Beijing of issuing a “hostile order” and said he was compelled “to financially counter their move.”
“For every element they’ve been able to monopolize, we have two,” he wrote.
The White House and the Chinese embassy in Washington did not immediately respond to requests for comment. The U.S. Trade Representative’s Office declined to comment on possible next steps, while the U.S. Treasury Department also remained silent.
Tensions had been building in recent days. On Thursday, the Trump administration proposed banning Chinese airlines from flying over Russian airspace on U.S. routes. A day later, the Federal Communications Commission (FCC) reported that major U.S. retail platforms had removed millions of listings for prohibited Chinese electronics.
China’s latest export measures added five new rare earth elements and several refining technologies to its control list, while requiring foreign producers using Chinese materials to comply with its rules.
With the APEC Summit in South Korea set to begin October 31, analysts said the stakes are high for any potential Trump–Xi meeting—if it still occurs.
“Things are going to get interesting,” said Scott Kennedy, a China business and economics expert at the Center for Strategic and International Studies in Washington. “Both sides seem to believe that increasing pressure might force concessions ahead of APEC—or they’ve given up on a deal altogether and are now positioning for the next round of the fight.”
No comments:
Post a Comment