Key Takeaways
- President Donald Trump mentioned he’ll impose an extra 100% tariff on items from China beginning Nov. 1, reigniting a commerce battle between the world’s two largest economies.
- China has leveraged its dominance of the uncommon earth market as a bargaining chip in commerce negotiations with the U.S., which depends closely on uncommon earths for its high-tech industries.
The U.S.-China commerce battle flared up once more on Friday when President Donald Trump introduced a rise in import taxes as a part of a dispute over important “uncommon earth” minerals that China exports.
In a prolonged social media submit early on Friday, Trump questioned the necessity for an upcoming assembly with Chinese language chief Xi Jinping and threatened new tariffs in retaliation for China’s transfer on Thursday to limit its exports of uncommon earth minerals, that are important to high-tech manufacturing within the U.S. and overseas.
Later that day, he introduced that he would increase tariffs on Chinese language items by 100%, reverting them to ranges from earlier within the 12 months that had amounted to a near-embargo on commerce between the 2 nations.
The dispute threatened to derail commerce negotiations between the world’s two largest economies and reignite a commerce battle that had reached a peak earlier within the 12 months. In Could, the 2 sides agreed to a shaky truce. The 2 nations lowered their tariffs considerably whereas making an attempt to make a extra everlasting deal.
How This Impacts The Financial system
The flare-up in tensions between the U.S. and China may exacerbate a commerce battle that has already pushed up inflation and weakened the job market. Shares closed sharply decrease on Friday as commerce tensions resurfaced.
China has been ready to make use of its management of the uncommon earth market as leverage in opposition to the U.S. within the commerce dispute. Uncommon earths comparable to Neodymium, which is used to make magnets, are essential for electronics, cars, weapons, and different industries. On Thursday, China introduced sweeping new restrictions on uncommon earth exports forward of a doable assembly between Trump and his Chinese language counterpart in South Korea.
“This impacts ALL Nations, with out exception, and was clearly a plan devised by them years in the past,” Trump wrote Friday afternoon. “It’s completely exceptional in Worldwide Commerce, and an ethical shame in coping with different Nations.”
The trajectory of U.S.-China commerce relations has been unstable since Trump took workplace for the second time in January. In latest months, the commerce wars appeared to calm down, with Trump touting a deal on the possession of TikTok. However within the newest submit, Trump used harsh language, describing China’s gaining management over the uncommon earth market as “a reasonably sinister and hostile transfer.”
Replace, Oct. 10, 2025: This text has been up to date to replicate extra info posted by President Donald Trump on social media. A headline on the earlier model of this text misidentified the rise within the tariff. It elevated by 100%.
