Trump Announces Additional 100% Tariff on China Over Rare-Earth Export Restrictions Starting November

President Donald Trump announced on Friday that he would impose an additional 100% tariff on Chinese goods starting 1st November, massively escalating the trade war between the world's two largest economies.

The move comes in direct response to China's sweeping new export controls on rare-earth elements, critical minerals essential to defence technology, semiconductors and electric vehicles. The tariff would be levied "over and above any tariff they are currently paying", Trump wrote on Truth Social, with the effective date potentially arriving even sooner depending on further Chinese actions.

China expanded its rare-earth export restrictions on Thursday, adding five additional elements to the seven already under control since April. The new measures, outlined in "announcement number 61 of 2025", bring the total number of restricted rare-earth metals to 12 out of 17 types. Foreign companies must now obtain special licences from Beijing to export products containing even trace amounts—as little as 0. 1%—of Chinese-sourced rare earths. China processes approximately 90% of the world's rare earths and accounts for about 70% of global supply, giving it substantial leverage in trade negotiations.

The timing of China's announcement, just weeks before a planned meeting between Trump and President Xi Jinping at the Asia-Pacific Economic Cooperation summit in South Korea, has ratcheted up bilateral tensions. Trump suggested today that he may cancel the meeting entirely, stating "now there seems to be no reason to do so". The leaders were expected to announce a comprehensive trade deal at the late October summit, but the rare-earth dispute has upended months of negotiations. Current US tariffs on Chinese goods stand at approximately 30%, down from a high of 145% earlier this year following a trade truce agreed in May and extended through 10th November.

Financial markets reacted sharply to Trump's announcement, with the S&P 500 falling 2. 7% and the tech-heavy Nasdaq plunging 3. 6% before the closing bell—the largest daily drop since April. The new tariffs would significantly impact American industries already struggling with rare-earth shortages, as these minerals are crucial for manufacturing F-35 fighter jets, submarines, radar systems and consumer electronics.

Trump also announced that the US would impose export controls "on any and all critical software" beginning 1st November, whilst China separately unveiled special port fees on American ships starting 14th October. The escalating tensions threaten to derail the fragile trade truce and potentially trigger a full-scale economic confrontation between Washington and Beijing.