China has accused the United States of provoking new trade tensions after Donald Trump threatened to impose a 100% tariff on Chinese imports. Beijing called the threat “a clear act of double standards” and warned it could retaliate if Washington follows through. A commerce ministry spokesperson said China “will not start a trade war but will not fear one either.”
Trump escalates rhetoric against Beijing
Trump lashed out after China tightened export rules on rare earth materials used in advanced technologies. He accused Beijing of acting “hostile” and trying to hold the world “captive.” The former U.S. president also hinted he might cancel a planned meeting with President Xi Jinping later this month. But his tone softened days later. On Sunday, Trump posted online: “Don’t worry about China, it will all be fine!” He praised Xi as “highly respected” and said both leaders wanted to avoid an economic crisis.
Global markets shaken by tariff threats
Financial markets reacted sharply to Trump’s remarks. On Friday, the S&P 500 index fell 2.7%, its steepest drop since April. Asian stocks followed the decline. On Monday, the Shenzhen Component Index dropped over 2.5%, while Hong Kong’s Hang Seng fell about 3.5%. Investors feared the world’s two largest economies were edging toward another trade war.
Fragile trade agreement under renewed strain
In May, Washington and Beijing had agreed to suspend triple-digit tariffs on each other’s goods. That deal had briefly raised hopes for stability in global trade. Earlier this year, U.S. tariffs on Chinese products had increased 30%, while China imposed a 10% tariff on American exports. Trump’s latest warning now threatens to undo that fragile progress.
Beijing condemns U.S. export restrictions
China’s commerce ministry issued a written response accusing Washington of abusing export controls and discriminating against Chinese companies. Officials defended China’s restrictions on rare earth exports as “normal and necessary measures” to protect national security. “Threatening tariffs is not a solution,” the spokesperson said. “China’s position remains firm: we seek dialogue, not confrontation, but we will respond if provoked.”
Rare earths emerge as key pressure point
Beijing’s recent tightening of rare earth export controls highlights its dominance in a critical sector. China processes around 90% of the world’s rare earths, essential for producing smartphones, electric vehicles, and solar panels. Analysts view the move as a warning that Beijing can use its industrial strength as leverage in future trade talks.
Uncertainty surrounds Trump-Xi summit
The escalating exchange between Washington and Beijing appears to be a strategic buildup before renewed negotiations. Yet uncertainty now hangs over whether Trump and Xi will meet as planned at a summit in South Korea later this month. Both sides seem determined to stand firm, setting the stage for another tense round in the long-running trade dispute.
