President Donald Trump declared on Friday that he will impose a 100% tariff on all imports from China, dramatically escalating the ongoing trade conflict between the two nations. In the same Truth Social post announcing the tariffs, the President also stated he would impose export controls on “any and all critical software” originating from the United States.
Retaliation for Rare Earths and Previous Tariffs
This action is a direct response to China’s announcement earlier this week that it is tightening its export controls on rare earth minerals. China, which is the world’s largest producer of these minerals—essential components for advanced technology like semiconductors and solar panels—now requires foreign companies to apply for an export license for products containing even a small amount of the minerals.
President Trump condemned China’s move in his post, describing it as “absolutely unheard of in International Trade, and a moral disgrace in dealing with other Nations.” He added a dramatic flourish, writing, “It is impossible to believe that China would have taken such an action, but they have, and the rest is History.” The new tariffs are scheduled to take effect on November 1 and will be “over and above” any duties already imposed on Chinese imports, which CNBC reports already have a base tariff rate of 40%. After posting the threat, President Trump reportedly told journalists that the tariffs could still be walked back and that he would not necessarily cancel a scheduled meeting with Chinese President Xi Jinping.
Severe Financial Market Impact
The news immediately sent shockwaves through global markets. Following President Trump’s announcement, stocks tumbled, with the Dow Jones Industrial Average closing down 1.9% on Friday. The broader S&P 500 fell by 2.71%, and the technology-focused Nasdaq dropped by 3.56%. Certain tech companies were hit particularly hard, with Nvidia and Tesla both declining by approximately 5% at market close. The escalating trade tensions also affected the volatile crypto markets, leading to liquidations that were reportedly 10 times the dollar value of liquidations recorded during the FTX collapse.
What The Author Thinks
President Trump’s threat of a 100% tariff is a clear, theatrical escalation designed to force a quick concession from China, demonstrating a complete disregard for the stability of global supply chains and financial markets. By imposing a punitive measure that directly mirrors China’s control over rare earths, the administration is engaging in economic jujitsu, transforming a resource monopoly into a market-wide crisis. The resulting massive sell-off in the stock market confirms that investors view this as politically motivated brinkmanship rather than sound economic policy, as the ultimate cost of these tariffs will inevitably be borne by U.S. consumers and companies.
Featured image credit: PICRYL
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