US President Donald Trump has announced an additional 100% tariff on Chinese imports and new export controls on critical software, escalating tensions amid China’s rare earth export restrictions. The move rattled financial markets, while China responded with new port fees and an antitrust probe into Qualcomm. Experts say both sides are positioning for upcoming trade talks, though a Trump–Xi meeting remains uncertain.
US President Donald Trump has announced plans to impose an additional 100% tariff on Chinese imports starting next month.
In a post on social media, Trump also revealed that the US would introduce new export controls targeting critical software.
Earlier on Friday, he responded to Beijing’s decision to tighten its rules on rare earth exports, accusing China of becoming “very hostile” and attempting to hold the world “captive.”
Trump further threatened to withdraw from an upcoming meeting with Chinese President Xi Jinping, though he later clarified that while he hadn’t cancelled it, he was unsure if it would still take place. “I’m going to be there regardless,” he told reporters at the White House.
Financial markets reacted sharply to his comments, with the S&P 500 dropping 2.7%—its steepest decline since April.
China remains the world’s dominant producer of rare earths and several other essential materials used in cars, smartphones, and other technologies.
The last time Beijing restricted rare earth exports—after Trump raised tariffs earlier this year—many US companies dependent on these materials voiced strong concerns. Ford even had to temporarily halt production.
Alongside the export restrictions, China has launched a monopoly investigation into US tech giant Qualcomm, potentially delaying its acquisition of another chipmaker. Although Qualcomm is based in the US, much of its revenue comes from China.
Beijing also announced new port fees for ships connected to the US, including those owned or operated by American firms.
“Some very strange things are happening in China!” Trump wrote on social media. “They are becoming very hostile.”
The US and China have maintained a fragile trade truce since May, when both agreed to lift triple-digit tariffs that had nearly frozen bilateral trade.
Under the current arrangement, US tariffs on Chinese goods still stand 30% higher than at the beginning of the year, while US exports to China face a 10% tariff.
Officials from both sides have continued talks covering issues such as TikTok, agricultural trade, rare earths, and advanced technologies like semiconductors.
The next round of discussions was expected to take place this month at a summit in South Korea.
Jonathan Czin, a China expert and fellow at the Brookings Institution, said Xi’s latest measures were designed to shape the agenda for those talks. He noted that China’s new rare earth rules do not take effect immediately.
“Xi is trying to seize the initiative,” Czin explained. “The Trump administration is being forced into a reactive position, addressing each new issue as it emerges.”
He added that China likely isn’t concerned about US retaliation.
“From the past cycles of escalation and de-escalation, China concluded it could endure more pain,” he said. “They believe the Trump administration blinked first.”
In previous trade negotiations, Beijing has sought fewer US restrictions on semiconductors and more predictable tariff policies to facilitate Chinese exports to America.
Xi has also leveraged China’s dominance in rare earth production to strengthen his bargaining position.
However, experts say the latest export rules, which target foreign defense manufacturers, raise the stakes significantly.
“Nothing gets America’s attention like threats to our defense industry,” said Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies. “The US will have to negotiate because its options are limited—and in a time of rising geopolitical tension, strengthening our industrial defense base is crucial.”
While a Trump–Xi meeting now appears uncertain, Baskaran noted that it’s not entirely off the table. Since China’s new export measures don’t take effect until December, she said, “There’s still time and space for talks.”
“Negotiations are likely imminent,” she added. “Who leads them and where they take place will become clear soon.”