U.S. President Donald Trump reignited the trade war with China on Friday, abruptly ending a fragile truce between the world’s two largest economies by announcing sweeping new tariffs and export restrictions in response to Beijing’s latest curbs on rare earth element exports.
Speaking from the White House and posting to his Truth Social platform, Trump unveiled a dramatic set of measures including a 100% tariff on Chinese exports to the U.S. and new export controls targeting critical American software. The restrictions, set to take effect by November 1, come just days before existing tariff relief is scheduled to expire.
The president also cast serious doubt on the planned summit with Chinese President Xi Jinping later this month, saying, “now there seems to be no reason to do so.” While he later softened the statement, telling reporters, “I would assume we might have it,” Beijing has yet to confirm the meeting, which had been expected to take place on the sidelines of the Asia-Pacific Economic Cooperation (APEC) forum in South Korea starting October 31.
The renewed hostilities were triggered by China’s decision on Thursday to expand export controls on rare earth elements and related refining technologies — critical materials for sectors ranging from clean energy to military hardware. China controls over 90% of global supply of processed rare earths.
“It was shocking,” Trump said of Beijing’s move. “I thought it was very, very bad.” He further called China’s actions a “hostile order” and said the U.S. had been “forced to financially counter their move.”
Markets Tumble Amid Trade Turmoil
The surprise escalation sent shockwaves through global markets. The S&P 500 (.SPX) suffered its steepest single-day decline since April, sliding more than 2%. Investors sought refuge in traditional safe havens like gold and U.S. Treasury bonds, while the U.S. dollar weakened against a basket of currencies. Technology stocks took a particularly hard hit in after-hours trading, amid fears the export controls on software could disrupt major sectors such as cloud computing and artificial intelligence.
“Trump’s post could mark the beginning of the end of the tariff truce,” said Craig Singleton, a China expert at the Foundation for Defense of Democracies, in an interview with Reuters. Singleton noted that Washington interpreted China’s export restrictions as a betrayal after months of cautious diplomacy. “Beijing appears to have overplayed its hand.”
The administration is also weighing export controls on airplanes and airplane parts, according to a source familiar with the matter, suggesting the list of potential countermeasures may continue to grow.
Diplomatic Fallout and Strategic Calculations
Trump accused Beijing of lobbying foreign governments with policy documents threatening widespread export controls on rare earth-related materials. He claimed multiple countries had contacted him, expressing concern over China’s move.
“For every element that they have been able to monopolize, we have two,” Trump declared, downplaying China’s leverage while vowing to increase domestic sourcing and diversification efforts.
As of Friday evening, the White House, U.S. Trade Representative, and U.S. Treasury declined to comment further. The Chinese embassy in Washington also did not respond to requests for clarification.
Meanwhile, economic tensions have been mounting beyond rare earths. The Trump administration on Thursday proposed banning Chinese airlines from flying over Russian airspace on U.S. routes — a move with geopolitical overtones. Additionally, the Federal Communications Commission (FCC) reported that U.S. online retailers had begun removing millions of Chinese electronic products that violate U.S. trade or security restrictions.
China’s latest export controls added five new elements and dozens of refining technologies to its restricted list and expanded regulatory oversight to foreign firms using Chinese materials abroad.
What’s Next?
Analysts warned that the rapidly deteriorating trade environment now places even greater importance on the outcome of the potential Trump-Xi meeting later this month — if it happens at all.
“Things are going to get interesting,” said Scott Kennedy, a senior advisor at the Center for Strategic and International Studies. “Both sides seem to be trying to gain leverage either for a breakthrough at APEC or the next round of confrontation.”
With time running out before the new measures hit, all eyes will be on whether diplomacy can still rescue a trade relationship already strained to the breaking point. For now, Trump’s latest salvo marks a stunning reversal of the summer’s fragile ceasefire — and signals a potentially volatile new chapter in U.S.-China economic relations.
