Washington/Beijing — The fragile trade truce between the United States and China has been shattered, with US President Donald Trump dramatically escalating tensions by threatening a 100% tariff on all imports from China, effective November 1, 2025.
The announcement, made via social media, also includes sweeping new US export controls on “any and all critical software” from American firms to China. Mr. Trump’s swift response came after Beijing tightened its grip on the global supply of rare earth elements—minerals essential for high-tech, electric vehicle, and defense industries.
Latest Updates and Developments:
- Tariff Details: The 100% levy is announced as an “over and above” addition to any existing tariffs, which would raise the total effective tariff rate on Chinese goods to about 130% for many products. The measure is set to take effect on November 1, or possibly sooner.
- China’s Actions: The escalation was triggered by China’s move to significantly expand its export controls on rare earth elements (including new additions like holmium, erbium, and ytterbium) and related technologies, citing national security concerns. China’s new rules are highly restrictive, even applying to foreign-made products containing a trace amount (>0.1%) of Chinese-origin rare earths or produced using Chinese technology. China also imposed new export curbs on lithium-ion batteries and graphite anode materials for EVs.
- Impact on Xi-Trump Meeting: Mr. Trump openly questioned the upcoming meeting with Chinese President Xi Jinping, scheduled for the APEC Summit in South Korea later this month, stating there now “seems to be no reason to do so.” While he later clarified the meeting hasn’t been formally cancelled, its prospects are now highly uncertain.
- Market Reaction: Global financial markets reacted with alarm. The benchmark S&P 500 Index plunged by over 2%, its worst single-day drop since April, and the technology-heavy Nasdaq Composite sank over 3.5%. Investors fled to safe-haven assets like gold and US Treasury securities, and reports indicate over $1.5 trillion in market value was wiped out from US stocks.
- Expert Analysis: Analysts view this as the most severe rupture in relations in six months, with experts like Craig Singleton of the Foundation for Defense of Democracies stating the post could “mark the beginning of the end of the tariff truce.”
The aggressive trade measures from both sides signal a severe rekindling of the trade war, threatening to further disrupt global supply chains, particularly in the tech and clean energy sectors.
