(Image source from: x.com/WhiteHouse)
US President Donald Trump has revealed a significant increase in his trade conflict with China: a total 100% tax on all products coming from China beginning November 1. This decision comes after China imposed broad new regulations on the export of rare-earth minerals. These essential resources are important for semiconductors, fighter planes, and other advanced tech. In a post on Truth Social, Trump accused China of being "extremely aggressive" and labeled its actions as "a moral disgrace in global trade." He warned that the taxes could be implemented even sooner if China takes further actions. According to US officials, China's export rules were intentionally aimed at gaining an advantage before the APEC summit in South Korea, where it was anticipated that Trump and Chinese President Xi Jinping would meet. That meeting now seems uncertain. Trump stated he finds no reason to meet with Xi, although he has not officially called it off.
This is partly revenge. China's limitations on rare-earth minerals directly affect America's manufacturing and defense sectors. The US has attempted to develop local capabilities by investing 400 million dollars in MP Materials, the sole US producer of rare-earth minerals, but it still relies heavily on Chinese supply chains. There is also a political angle. Trump has always portrayed himself as tough on trade. With markets feeling uneasy, he is signaling to his supporters that the US will not be intimidated. Additionally, it is a strategic move. Trump employs tariffs as a bargaining tool, implementing broad measures to push rivals toward discussions. This might be less about collecting tariffs and more about compelling China to negotiate on the US’s terms. There's also the visual aspect. The announcement coincided with Trump celebrating a breakthrough in Middle East peace talks. By combining diplomacy with economic firmness, he suggests a position of global strength on various fronts. However, market reactions were immediate. The Dow dropped almost 900 points, the S&P 500 fell by 2.7 percent, and the Nasdaq decreased by 3.5 percent, particularly affected by major technology and retail companies. Analysts caution that a renewed trade conflict could disrupt global supply networks just before the holiday season.
At this moment, it seems that Washington and Beijing are moving toward another tense confrontation: one that intertwines politics, power dynamics, and economic pressure and might alter global trade in the upcoming weeks.
