U.S. President Donald Trump has announced an additional tariff of 100% on all Chinese imports from November 1, on top of levies already in place, in retaliation for curbs on rare-earth exports imposed by China. Beijing “hit the world with something that really is not anything that people are going to do, and it was shocking”, Trump said, referring to the rare-earth export curbs. He also cast doubt on a possible meeting with Chinese President Xi Jinping on the sidelines of the APEC Summit in South Korea. “We’re gonna have to see what happens. That’s why I made it November 1. We’ll see what happens,” he said. “Also on November 1, we will impose export controls on any and all critical software”, Trump added, describing China’s actions as “absolutely unheard of in international trade, and a moral disgrace in dealing with other nations”.
Trump claimed that countries “throughout the world” had received “letters” from China expressing intentions to “impose export controls on each and every element of production having to do with rare earths, and virtually anything else they can think of, even if it’s not manufactured in China”. In a social media post, Trump said he had been “surprised” by China’s move, which he warned would “clog markets” and hurt global production across industries. “There is no way that China should be allowed to hold the world ‘captive’,” he wrote, calling the move “sinister and hostile”. In addition to the increased tariffs, Trump noted that “many other countermeasures” were “under serious consideration”. Trump emphasized the U.S. market’s leverage over China, saying: “We import from China massive amounts, and maybe we’ll have to stop doing that.”
Wall Street reacted strongly to Trump’s threats, sending markets spiraling. The S&P 500 dropped 2.7% in its worst day since April. The Dow Jones Industrial Average fell 1.9%, and the Nasdaq composite lost 3.6%. John Moolenaar, Chairman of the U.S. House Select Committee on China, said China’s new restrictive measures on rare earths were an “economic declaration of war” against the U.S. and “a slap in the face to President Trump amid his efforts to fight for a level playing field.” The Michigan Republican expressed his readiness to work with the Trump administration to “show China that its belligerent trade actions will be met with serious efforts to protect the American people, secure our supply chains, and cut off the flow of U.S. capital and technology into China”. However, Democrats on the House Foreign Affairs Committee in a statement blamed Trump for China’s tightening of rare earth exports. “China’s export controls didn’t come ‘out of nowhere’,” said Gregory Meeks, ranking member of the panel. “They are retaliation for Trump’s reckless trade war, where he used American export controls as negotiating leverage. Trump’s actions are resulting in expensive consequences for American families.”
The latest developments come as the world’s two largest economies now face a November 10 deadline to reach a comprehensive trade deal. Amid their negotiations, China has yet to purchase any U.S. soybeans this season, diverting orders instead to Brazil and Argentina, the South China Morning Post reports.
