President Donald Trump and Chinese President Xi Jinping were scheduled to meet later this month at the Asia-Pacific Economic Cooperation forum in South Korea
President Donald Trump on Friday announced a 100% additional tariff on Chinese goods and new export controls on critical US software after Beijing restricted exports of rare-earth minerals.
The new measures, set to begin November 1, aim to counter China’s dominance in processing rare earths—vital for semiconductors, electric vehicles, and defense equipment.
Trump also warned he may cancel his upcoming meeting with Chinese leader Xi Jinping. He said on Truth Social that he would “financially counter” China’s move, calling it a “hostile order.”
China’s export controls, announced Thursday, limit access to rare earth materials critical for producing chips, defense equipment, and AI technology. Regulations dictate that any foreign company that uses Chinese rare earths in its products must obtain approval from China before exporting them.
Analysts warn the move could disrupt global supply chains and increase production costs for US companies.
In June, the US and China had agreed to a deal framework that discussed loosening restrictions on rare earths exports. Experts say that China’s recent decision to reduce the supply of vital tech can be seen as a negotiation tactic.
Trump and Xi were scheduled to meet later this month at the Asia-Pacific Economic Cooperation forum in South Korea to discuss trade and technology tensions. However, Trump said there “seems to be no reason” to proceed with the talks.
The new escalation deepens the US-China trade standoff, with both nations trading economic threats as Washington seeks to reduce its dependence on Chinese raw materials.
The Southeast Asian nation controls over 50% of rare earths mining and processes over 90% of it.