Trump unveils a new 100% tariff on China and targets tech exports
US President Donald Trump has declared intentions to implement a 100 per cent tariff on Chinese goods and to establish export controls on all critical software starting November 1, 2025. This action has the potential to significantly heighten trade tensions with Beijing. The announcement, conveyed through an extensive post, charged China with adopting a “extraordinarily aggressive position on trade” and dispatching what Trump referred to as a “hostile letter to the world.” He asserted that Beijing aimed to implement “large-scale export controls on virtually every product they make, and some not even made by them,” describing it as “a moral disgrace in international trade.” Trump stated that the United States’ response would be “immediate and severe. Starting November 1, 2025 (or sooner, depending on any further actions taken by China), the United States will impose a 100 per cent tariff on China, over and above any tariff that they are currently paying. We will also impose export controls on any and all critical software,” he wrote. The announcement prompted a swift reaction from global financial markets. The S&P 500 Index experienced a decline of 2.7 per cent — marking its most significant single-day drop since April — whereas the Nasdaq 100 saw a sharper plunge of 3.5 per cent. The Dow Jones Industrial Average fell by 0.52 percent, while soybean futures experienced a nearly 2 percent decline due to concerns that Beijing might once more impose restrictions on imports of US agricultural products.
Shortly thereafter, China’s Ministry of Commerce revealed new export controls on rare earth materials and associated technologies, citing national security concerns. Exporters of products containing rare earth elements will now be required to obtain special licenses. Beijing has implemented port fees on US ships, initiated an anti-trust investigation into Qualcomm Inc, and suggested additional actions aimed at US companies operating within China. Several of these measures are scheduled to be implemented following November 8, creating a short period for discussions prior to the anticipated Xi–Trump summit later this month. President Donald Trump stated that the US could impose export controls on Boeing plane parts in response to China’s export limits on rare earth minerals. In his address to reporters at the White House on Friday, Trump emphasized that China depends significantly on Boeing aircraft and parts, pointing out the potential consequences of such measures. Boeing is currently engaged in discussions to sell as many as 500 jets to China, representing its first significant Chinese order since the Trump administration. However, analysts suggest that the financial implications are expected to be minimal. China currently holds orders for a minimum of 222 Boeing jets and operates a fleet of 1,855 aircraft from the US manufacturer, predominantly featuring the 737 single-aisle model. A ban on spare parts would also impact CFM International, the manufacturer of the LEAP engine for the 737 MAX, in addition to engines for the 777 and 787.
In contrast, Airbus has secured 185 orders from customers in China and manufactures A320 jets at its facility in Tianjin. China is developing its own COMAC C919 jet; however, US export restrictions on Western-supplied parts have hindered its production. To date, only five of the 32 jets expected this year have been delivered. Despite his firm position, Trump suggested that he could reevaluate the tariffs should Beijing retract its intended limitations on rare earth exports, which are essential for semiconductor and defense manufacturing. “That’s why I made it Nov 1st — we’ll see what happens,” he stated. Trade experts observed that the timing of the announcements highlighted the fragility of US–China ties. Wendy Cutler stated that the escalating measures “highlight how unstable the bilateral relationship remains” and cautioned that it was uncertain whether “cooler heads will prevail.” The Office of the US Trade Representative has separately imposed a 100 per cent tariff on Chinese ship-to-shore cranes and cargo-handling equipment, while also proposing duties of up to 150 per cent on other cargo machinery. The measures expand upon previous initiatives aimed at limiting imports of port and infrastructure equipment manufactured in China. The renewed confrontation poses a significant risk to the ongoing negotiations aimed at reinstating China’s imports of US soybeans — a crucial export for American farmers. US Trade Representative Jamieson Greer stated that Washington was examining new markets in Vietnam and Cambodia, along with domestic industrial applications for soybeans, to mitigate potential losses.
Rare earths continue to be the focal point in the trade confrontation. Earlier this year, following Trump’s decision to raise tariffs, Beijing responded by halting rare earth exports, leading to a temporary truce between both parties. The recent measures now threaten to rekindle that dispute, jeopardizing industries reliant on these essential minerals utilized in electronics, electric vehicles, and weaponry. Trump’s announcement represented a significant shift from his previously conciliatory tone just a day prior, during which he had conveyed optimism about convincing President Xi Jinping to lift the soybean import suspension. “He’s got things he wants to discuss with me, and I have things to discuss with him,” Trump stated on October 9. Hours earlier, in another post, Trump had accused China of “lying in wait” and acting against the US as he prepared to travel to the Middle East to mark the Israel–Hamas peace deal. “The Chinese letters were especially inappropriate,” he wrote. “This was the day that, after three thousand years of bedlam and fighting, there is peace in the Middle East.” Trump stated that he was set to meet Xi at the forthcoming APEC Summit in South Korea in two weeks, but “now there seems to be no reason to do so.”
