Trump Announces Tariff Increase on China

President Trump declared on Friday that he would raise tariffs on China, aiming to respond to recent regulatory changes by the Chinese government concerning critical minerals and rare earth elements.

In a message on Truth Social, he stated that starting November 1st, or possibly sooner, there will be a 100% tariff on goods imported from China. This new tariff will replace the existing ones currently in place.

Additionally, the administration plans to enforce export controls on “all critical software.”

“I can’t believe China did that, but they did, and the rest is history,” Trump remarked.

This week, China announced that foreign companies must acquire a permit to export products that contain more than 0.1% of rare earths sourced from China or produced using Chinese extraction processes. It’s noteworthy that China holds approximately 70% of the world’s rare metals and rare earths.

These rare earths and critical minerals find their way into numerous products, including cars, semiconductors, and electronics like laptops.

In his Truth Social post, Trump criticized China’s actions, labeling them as “completely unprecedented in international trade and a moral disgrace to dealing with other countries.”

He proposed potential countermeasures and hinted that he might refrain from engaging in talks with Chinese President Xi Jinping at the upcoming summit in South Korea.

The announcement about tariff increases came just after the stock market closed for the day. However, stocks had already experienced a marked decline following Trump’s initial threat of new tariffs.

On that day, the Dow Jones Industrial Average fell by 876 points, which translated to a 1.9% loss. The S&P 500 Index dropped by 2.7%, while the tech-heavy Nasdaq Composite Index saw a decrease of 3.6% before the markets closed.

Throughout his second term, Trump has generally spoken positively about Xi, even while imposing tariffs on China related to fentanyl entering the U.S. and maintaining tariffs from his first term.

These tariffs are particularly challenging for U.S. farmers, as China has ceased purchasing soybeans from American producers.

Updated at 5:12 PM EDT