NextFin news, WASHINGTON — On Friday, October 10, 2025, President Donald Trump threatened to impose a new 100% tariff on Chinese imports beginning November 1 or earlier, intensifying trade tensions between the United States and China and sparking fears of a global recession.
The announcement came amid China's recent restrictions on rare earth mineral exports, which are critical for manufacturing electronics, computer chips, lasers, and military technologies. China now requires foreign companies to obtain special approval for shipping these minerals abroad and has imposed permitting requirements on technologies used in mining and recycling rare earths. Export requests related to military goods are to be rejected, according to Chinese government statements.
President Trump expressed frustration with China's export controls, describing them as "shocking" and "out of the blue" on social media. He accused China of becoming "very hostile" and holding the world "captive" by limiting access to these essential materials. Trump stated that the U.S. would respond by imposing a 100% tariff on Chinese goods, in addition to existing tariffs, and would implement export controls on critical American software.
Trump's tariff threat follows a backdrop of ongoing trade disputes between the two economic powers. Earlier this year, tariffs had been reduced after negotiations in Switzerland and the United Kingdom, but tensions remain high due to China's export restrictions and U.S. sanctions on Chinese companies.
The announcement caused a sharp market reaction, with the S&P 500 index dropping 2.7%, marking its worst day since April 2025 when similar tariff threats were made. Analysts warn that escalating tariffs could disrupt global supply chains and slow economic growth worldwide.
Despite the heightened tensions, Trump did not formally cancel a planned meeting with Chinese President Xi Jinping scheduled during his upcoming trip to South Korea for the Asia-Pacific Economic Cooperation summit. However, he indicated uncertainty about whether the meeting would take place, stating, "I'm going to be there regardless, so I would assume we might have it."
Experts note that while the situation is serious, there remains room for de-escalation. Sun Yun, director of the China program at the Stimson Center, described China's export restrictions as a "disproportional reaction" to U.S. sanctions and suggested that mutual concessions could preserve diplomatic dialogue.
The European Union Chamber of Commerce in China highlighted that the new export controls add complexity to the global rare earth supply chain, which is already strained by previous restrictions.
Trade analysts caution that the combined effect of increased tariffs and export controls could exacerbate inflationary pressures and weaken fragile job markets, especially as the U.S. government faces shutdown-related challenges and federal worker layoffs.
The Chinese Embassy in Washington had not responded to requests for comment as of Friday evening.
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