U.S. President Donald Trump has reignited tensions with Beijing after announcing plans to impose additional tariffs of up to 100 percent on Chinese goods and threatening to cancel his upcoming meeting with Chinese President Xi Jinping.
In a post on Truth Social on Friday, Trump accused China of taking an “extraordinarily aggressive position on trade,” warning that Washington would introduce “large-scale export controls on virtually every product they make”, including critical software and high-tech items.
The measures, he said, would take effect on November 1—or sooner—depending on China’s actions.
Trump’s announcement follows Beijing’s decision earlier this week to implement new export controls on rare earths and critical minerals—materials vital to global industries such as electronics, defence, and clean energy.
Under the Chinese rules, foreign companies must obtain Beijing’s approval to export goods containing even small quantities of rare earths sourced from China. The move, seen as part of China’s broader strategy to exert leverage over global supply chains, sparked immediate alarm in Washington.
“This was a real surprise, not only to me, but to all the leaders of the free world,” Trump wrote. “I was to meet President Xi in two weeks… but now there seems to be no reason to do so.”
The two leaders were scheduled to meet on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in South Korea later this month—a meeting global markets had hoped would stabilise relations between the world’s two largest economies.
Cory Combs, Associate Director at consultancy Trivium China, said Beijing likely did not anticipate Trump’s response to be “this blunt and severe.”
“If they had, I can’t imagine they would’ve gone with this as a strategy,” Combs said, adding that while China could respond with more “tit-for-tat” measures targeting U.S. supply chains, Beijing may now seek to adjust its approach.
Wang Wen, Dean of the Chongyang Finance Research Institute at Renmin University in Beijing, downplayed the threat, saying Trump could not fully block Chinese imports.
“A large number of ‘Made in China’ goods are irreplaceable,” Wang said, suggesting that even with new tariffs, Chinese products would find ways into the U.S. market through re-exports.
He added that China’s rare earth restrictions were a response to U.S. sanctions on Chinese vessels, warning that “if the United States chooses to engage in conflict, China will stand firm and continue the fight.”
The announcement rattled global markets on Friday. The S&P 500 plunged 2.7 percent—its steepest one-day fall since April—while the Nasdaq Composite tumbled 3.6 percent. The yield on two-year U.S. Treasuries fell to a three-week low, and the U.S. dollar dropped 0.7 percent against a basket of major currencies.
Trump later softened his tone, suggesting the Xi meeting might still go ahead. “I’m going to be there regardless, so I assume we might have it,” he told reporters in the Oval Office. “We’re going to have to see what happens.”
The president added that potential U.S. export controls could extend to “airplane parts” and other key goods. “We were just surprised at China. I have a very good relationship with President Xi, and they did that. This is not something that I instigated,” he said.
The latest escalation threatens to unravel a 90-day trade truce that has held since mid-August, keeping tariffs at existing levels. Earlier this year, Trump imposed 145 percent tariffs on Chinese imports, prompting Beijing to retaliate with 125 percent levies on U.S. goods.
The average U.S. tariff on Chinese imports now stands near 58 percent, while China’s average tariff on U.S. products is about 37 percent, according to the Peterson Institute for International Economics.
U.S. Treasury Secretary Scott Bessent warned that the deteriorating situation amounts to a “de facto trade embargo.”
Beijing’s latest rare earth policy has been described as a Chinese version of the U.S. “foreign direct product rule”, which Washington uses to restrict chip exports to China. Analysts believe it was intended to strengthen Beijing’s bargaining position ahead of the Xi-Trump summit.
“Nobody has ever seen anything like this,” Trump wrote. “It would clog the markets and make life difficult for virtually every country in the world—especially for China.”
As both sides harden their positions, fears are mounting that the world could witness a renewed U.S.-China trade war—one that could ripple through global supply chains, energy markets, and inflation forecasts.
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