Trump announces an extra 100% tariff on imports from China
What's the story
US President Donald Trump has announced plans to impose an extra 100% tariff on imports from China starting next month. The announcement comes after Beijing tightened its export rules for rare earths, a move Trump has criticized as "very hostile." He expressed uncertainty about a scheduled meeting with China's President Xi Jinping over these developments.
Trade tensions
Trump's social media posts
In his social media posts, Trump slammed China's recent move to tighten its export rules for rare earths. He accused the country of "becoming very hostile" and trying to hold the world "captive." Despite expressing uncertainty about his meeting with President Xi, Trump later clarified that he hadn't canceled it and was still planning to attend.
Economic impact
Financial markets react to Trump's remarks
Trump's remarks sent financial markets tumbling, with the S&P 500 closing down 2.7%, its biggest drop since April. China is a major producer of rare earths and other critical materials used in cars, smartphones, and other products. In response to the current tightening of export controls by Beijing, many US companies dependent on these materials have protested strongly.
Trade disputes
China's other moves against US companies
Along with tightening rare earth export rules, China has also launched a monopoly investigation into US tech giant Qualcomm. This could delay its acquisition of another chipmaker. Despite being based in the US, a large part of Qualcomm's business is in China. Beijing has also announced new port fees for ships linked to the US, including those owned or operated by American companies.
Diplomatic efforts
US and China's trade detente since May
Since May, the US and China have maintained a fragile trade detente after agreeing to drop triple-digit tariffs on each other's goods. However, the situation is still tense with US tariffs on Chinese goods facing an additional 30% levy compared to earlier this year. Talks have been held on various issues including TikTok, agricultural purchases, and rare earths trade. A meeting with President Xi in South Korea was expected this month but now seems unlikely due to these developments.