President Trump on Friday stated that he will impose 100% tariffs on all goods from China in response to the restrictions announced by Beijing this week regarding rare earth minerals, leading to a sharp escalation of tensions between the world's largest economies. Trump also added that Washington will impose export controls on «critical software», but did not specify which technologies would be subject to restrictions, noting that «other serious countermeasures are being considered».
On the social network Truth Social, Trump wrote that the tariffs will take effect on November 1 and will be imposed «on top of» other tariffs on Chinese exports, which already amount to 30 percent, and in some cases much more.
The US President called the restrictions imposed by China this week on the export of rare earth minerals «sinister and hostile» and stated that they «will complicate life for practically all countries in the world». He added that he planned to meet with Xi in two weeks at an international economic conference in South Korea, «but now it seems there is no reason for this».
As The New York Times writes, markets reacted to these events with a decline — the S&P 500 index fell by more than 2% on Friday. Technology company stocks also fell: Nvidia dropped by almost 5%, Advanced Micro Devices by almost 8%, and the semiconductor sector as a whole by more than 5%.
Rare earth minerals, which are necessary for the production of a wide range of products, including engines, brakes, semiconductors, and fighter jets, have become a source of tension in US-China relations this year.
In April, the Chinese government responded to the harsh tariffs imposed by Trump on Chinese goods by restricting the export of minerals intended for American automakers and defense enterprises.
Ultimately, this spring, officials from both countries reached a fragile truce, resulting in Trump reducing tariffs, and Beijing approving an increase in mineral exports. However, a new round of trade war began a few months later.
The Chinese government stated that it will require companies worldwide to obtain licenses if they export products containing even minimal amounts of Chinese-produced rare earth elements, including for chip production. At the same time, companies with any connection to foreign armed forces will mostly be denied such licenses, according to the statement.
China mines 70% of the world's rare earth metal reserves and conducts chemical processing of approximately 90% of the global volume of these minerals.
Trump stated that, although China has a monopoly on rare earth minerals, the US has other monopolies that are «stronger and have more far-reaching consequences». «I just haven't decided to use them, I never had a reason to — until today!», Trump wrote.
Photo: The New York Times