US-China Trade Relations

Introduction to Tariffs

Donald Trump has announced that the US will impose an additional 100% tariff on Chinese imports, accusing the country of taking an "extraordinarily aggressive stance" on trade. In a post on his Truth Social platform, the US President said Beijing had sent an “extremely hostile letter to the world” and imposed “sweeping export controls on virtually every product they produce.”

Imposition of Tariffs

Mr. Trump, who warned the additional tariffs would begin on November 1, said the US would also impose export controls on all critical software to China. The president added that he was imposing the tariffs due to China’s export controls on rare earths. He wrote: “Based on the fact that China has taken this unprecedented position, and speaking only for the USA, The United States of America, and not other nations that have been similarly threatened, will impose a 100% tariff on China in excess of any tariffs it currently pays beginning November 1, 2025 (or sooner, depending on further actions or changes by China).”

Cancelled Meeting with Xi Jinping

Mr. Trump said earlier Friday that there “seems to be no reason” for a meeting with the Chinese leader Xi Jinping in a planned meeting as part of an upcoming trip to South Korea later this month. He had posted: "I was supposed to meet President Xi at APEC in South Korea in two weeks, but now there seems to be no reason to." The trip was scheduled to include a stop in Malaysia, where the Association of Southeast Asian Nations summit is taking place, a stop in Japan and then a stop in South Korea, where Mr. Trump would meet Mr. Xi before the Asia-Pacific Economic Cooperation summit.

Escalating Tensions

The move marked the biggest break in relations in six months between Beijing and Washington – the world’s biggest factory and its biggest consumer. There is also a risk of escalating tensions between the two countries and raising concerns about the stability of the global economy. Mr. Trump added: “There are many other countermeasures that are also being seriously considered.”

Impact on Global Economy

Friday was the worst day on Wall Street since April. The S&P 500 fell 2.7% on fears about U.S.-China relations. China restricted access to rare earths in the run-up to the meeting between Presidents Trump and Xi. Under the restrictions, Beijing would require foreign companies to obtain special permission to ship the metal items abroad.