In Retaliatory Move, Trump Threatens 100% Tariffs on Chinese Goods

The president made the threat after Beijing imposed new global restrictions on the use of rare earth minerals, which are vital supplies for U.S. makers of chips and batteries.

President Trump on Friday said he would impose a 100 percent tariff on all products from China in response to curbs Beijing announced this week on rare-earth minerals, a rapid escalation of tensions between the world's largest economies.

On Truth Social, Mr. Trump wrote that the tariffs would take effect on Nov. 1 and be imposed “over and above” other tariffs on Chinese exports, which are already 30 percent and in some cases much higher. The United States would also put export controls on critical software, he said.

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In an earlier post on Friday, the president threatened to retaliate and cancel a planned meeting with China’s leader, Xi Jinping.

Mr. Trump called the curbs that China put out this week on its exports of rare-earth minerals “sinister and hostile” and said they would “make life difficult for virtually every Country in the World.” He added that he had planned to meet Mr. Xi in two weeks at an international economic conference in South Korea, “but now there seems to be no reason to do so.”

“One of the Policies that we are calculating at this moment is a massive increase of Tariffs on Chinese products coming into the United States of America,” he wrote. “There are many other countermeasures that are, likewise, under serious consideration.”

Markets shuddered at the developments — the S&P 500 index sliding more than 2 percent on Friday.

Speaking Friday evening, the president suggested that the tariffs could be walked back before the Nov. 1 deadline and that he would not necessarily cancel his planned meeting with Mr. Xi.

“We’ll see what happens,” Mr. Trump said. He called China’s move “very, very bad.”

Rare-earth minerals, which are vital for making an array of products including motors, brakes, semiconductors and fighter jets, have been at the center of tensions between the United States and China this year. Mr. Trump has also placed extreme tariffs on Chinese exports before, only to walk them back after they restricted trade and hurt companies in both countries.

In April, the Chinese government responded to the stiff tariffs Mr. Trump imposed on Chinese goods by clamping down on mineral exports destined for U.S. automakers and defense manufacturers.

The Trump administration tried to encourage China to back down by imposing its own restrictions on exports of chip design software, airplane engines and other products. U.S. tariffs on Chinese products rose to a minimum of 145 percent, bringing much trade between the countries to a halt and raising concerns about empty American store shelves.

China’s mineral curbs threatened to close U.S. factories and forced the United States, which depends on Chinese supplies, to pull back. Ultimately, officials from both countries reached a fragile truce in meetings this spring that led to Mr. Trump’s reducing his tariffs and Beijing’s approving more mineral exports.

On Thursday, Beijing again escalated its controls, asserting broader jurisdiction over the global manufacture of semiconductors and other technology.

The Chinese government said it would require companies anywhere in the world to obtain licenses if they are exporting products containing even a minimal amount of Chinese-produced rare earths, including for chip manufacturing. Those exports would also be controlled if the minerals were produced using Chinese mining, processing or magnet-making technologies.

Companies with any affiliation to foreign militaries would be denied those licenses, it said. The Chinese government also put new controls on equipment needed to manufacture batteries for electric cars.

The global nature of the Chinese restrictions mirror those that the United States has put on semiconductors, which dictate that any company using American chip technology anywhere in the world must follow United States guidelines.

China has responded to those restrictions by developing its own framework to regulate industries that it dominates. China mines 70 percent of the world’s rare earths and performs the chemical processing for roughly 90 percent of the global supply of the minerals.

The new restrictions have caused significant anxiety among U.S. companies. Analysts said the new limits could scramble the supply chains of some of the world’s biggest companies, including Nvidia and Apple.

Tech stocks were particularly hard hit on Friday, with Nvidia down almost 5 percent, Advanced Micro Devices falling almost 8 percent and the broader semiconductor sector sliding over 5 percent.

On Friday, China also announced an antimonopoly investigation into the American chipmaker Qualcomm and new fees for U.S. ships docking at Chinese ports.

Analysts had speculated that China’s mineral restrictions could be an effort to amass leverage ahead of the meeting between Mr. Trump and Mr. Xi.

If so, it could backfire. In addition to the president’s calls for retaliation, other critics of China said the measures highlighted the need for the United States to reduce its exposure to the Chinese economy. The Chinese government has set out ambitious plans in recent decades to dominate various industries, including steel, shipbuilding, robotics, rare earths and biomedicine.

John Moolenaar, the Republican chairman of the House Select Committee on China, called Beijing’s action “an economic declaration of war against the United States and a slap in the face to President Trump amid his efforts to fight for a level playing field.”

Mr. Moolenaar said the United States should immediately pass legislation to end preferential trade treatment for China, build the U.S. supply of minerals and “strangle China’s technology sector with export controls instead of selling it advanced chips.”

Wendy Cutler, a senior vice president at the think tank Asia Society Policy Institute, said the president’s statements showed “how fragile the emerging détente between the two countries really is.”

“Beijing has become increasingly assertive, believing it has the upper hand in the bilateral relationship,” she said. But Mr. Trump’s counter threats showed that “two can play this game.”

With the planned summit between the leaders in just over two weeks, it was unclear whether the two sides would be willing to de-escalate to hold the meeting, Ms. Cutler added.

In his social media post, Mr. Trump said that China’s policies “came out of nowhere.” The United States’ relationship with China over the past six months had been a very good one, he said.

The president said that although China had a monopoly on rare-earth minerals, the United States had other monopolies that were “stronger and more far reaching.” He added, “I have just not chosen to use them, there was never a reason for me to do so — UNTIL NOW!”

The White House has been planning for President Trump to travel to Asia later this month, where he would meet Mr. Xi on the sidelines of the Asia-Pacific Economic Cooperation meeting in South Korea.

The plans had generated speculation about whether the meeting could lead to an economic deal between the countries, potentially including Chinese purchases of American products or Chinese investment in the United States. Beijing has also been interested in having the United States roll back the global controls it has put on China’s access to advanced A.I. chips.

American farmers have asked the administration to push China to remove retaliatory tariffs on U.S. soybean exports that have had a crippling impact this year. Caleb Ragland, a Kentucky soybean farmer who is the president of the American Soybean Association, said that his group was “extremely disappointed” that the planned meeting between Mr. Trump and Mr. Xi would be canceled.

“Trade wars are harmful to everyone, and these latest developments are deeply disappointing at a moment when soybean farmers are facing an ever-growing financial crisis,” Mr. Ragland said.

Joe Rennison and Alan Rappeport contributed reporting.

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