US President Donald Trump announced an additional 100 percent tariff on China on Friday, threatening to cancel a planned summit with Xi Jinping at the APEC summit in South Korea later this month, reigniting the trade war between the world’s two largest economies.
Trump said the extra levies, along with US export controls on “any and all critical software,” would take effect from November 1 in retaliation for what he called Beijing’s “extraordinarily aggressive” moves to restrict access to rare earth minerals and magnets used in electronics, computer chips, lasers, and jet engines.
“There is no way that China should be allowed to hold the World ‘captive,'” Trump wrote on Truth Social, describing China’s stance as “very hostile.” He added that he was supposed to meet Xi at APEC in two weeks but “now there seems to be no reason to do so.”
Markets Slide on Escalation
Financial markets reacted sharply to the announcement. The Nasdaq fell 3.6 percent and the S&P 500 dropped 2.7 percent as investors priced in the prospect of a further escalation in trade tensions between Washington and Beijing. The new tariffs would stack on top of existing duties totaling 145 percent on Chinese goods, while China has imposed retaliatory tariffs of 125 percent on American products.
Trump later told reporters in the Oval Office that he had not formally canceled the APEC meeting. “I haven’t canceled, but I don’t know that we’re going to have it. But I’m going to be there regardless, so I would assume we might have it,” he said.
Rare Earth Dispute at Center of Tensions
The escalation comes amid a deepening dispute over China’s restrictions on rare earth exports, which are critical to manufacturing advanced technology and defense systems. The Arab News reported that China had recently sent letters to countries detailing export controls on rare earth minerals, prompting Trump’s response.
Differences remain over US access to Chinese rare earths, American restrictions on Chinese imports of advanced computer chips, soybean purchases, and a series of tit-for-tat port fees being imposed by both countries. Reuters noted that the port fees were set to begin on Tuesday.
Analysts warned of severe consequences if the dispute continues to escalate. “The risk is clear: Mutually assured disruption between the two sides is no longer a metaphor,” said a trade analyst cited by Khaleej Times. It remains unclear how Trump intends to follow through on his threats or how China plans to respond.
Sources: Arab News; Khaleej Times; Reuters; Bloomberg
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