On October 10, 2025, U.S. President Donald Trump announced a significant escalation in the U.S.-China trade conflict by imposing an additional 100% tariff on all Chinese imports, effective November 1, 2025, or sooner depending on China's actions. This new tariff is in addition to existing tariffs, bringing the total tariff rate on Chinese goods to approximately 130% .
The move follows China's recent expansion of export controls on rare earth minerals, which are critical for manufacturing semiconductors, electric vehicles, defense systems, and other high-tech products. China added five new rare earth elements—holmium, erbium, thulium, europium, and ytterbium—to its export control list, bringing the total to 12 of the 17 rare earth elements . These minerals are essential for various U.S. industries, and China's restrictions have raised concerns about supply shortages.
In response, President Trump also announced plans to implement export controls on all critical software made in the United States, starting November 1 . He expressed frustration over China's actions, calling them "shocking" and accusing Beijing of becoming increasingly hostile. Trump further indicated that he may cancel a scheduled meeting with Chinese President Xi Jinping at the upcoming Asia-Pacific Economic Cooperation (APEC) summit, further straining diplomatic relations .
Financial markets reacted negatively to the announcement, with the S&P 500 dropping 2.7%, the Nasdaq falling 3.6%, and shares in tech giant Nvidia declining nearly 5% . Analysts highlighted China's dominance in rare earth markets and the broader implications for U.S. industries.
This development marks a significant escalation in the ongoing trade war between the world's two largest economies, with both sides implementing measures that could have far-reaching economic and geopolitical consequences.
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