The United States has escalated its trade confrontation with China after President Donald Trump announced a 100 per cent tariff on all Chinese goods, effective November 1, 2025. The new tariff will be imposed "over and above any existing tariffs" currently levied on imports from China. 

This marks one of the most sweeping protectionist measures taken by Washington in recent years. Alongside the tariff move, Trump declared that the U.S. would also impose export controls on all critical software starting the same day, effectively curbing the flow of high-tech tools to Chinese entities.

President Trump made the announcement through a post on Truth Social on Friday, citing what he called an “extraordinarily aggressive” stance by China on trade. He accused Beijing of issuing a “hostile letter to the world” threatening large-scale export controls that would impact almost every product China produces, including ones it does not directly manufacture. Trump described these actions as “unheard of in international trade” and a “moral disgrace,” signalling a decisive break in attempts to calm tensions through dialogue.

The escalation follows China’s decision to expand its rare earth export restrictions, affecting a critical sector that underpins modern industry and defence manufacturing. The Chinese Commerce Ministry recently added five new rare earth elements—holmium, erbium, thulium, europium, and ytterbium—to its restricted export list, raising the total to twelve of the seventeen known rare earths. Export licences will now also be required for production technologies related to mining, refining, and magnet manufacturing.

Beijing defended its move, stating that the new rules are meant to “safeguard national security and interests” and prevent its resources from being used “directly or indirectly in military and sensitive applications.” Alongside these mineral curbs, new restrictions have also been introduced for lithium batteries and graphite anode materials used in electric vehicles, sectors in which China holds a dominant global position.

Analysts view this series of developments as a new phase in the long-running U.S.–China trade conflict, originally ignited during Trump’s first term in office. The rare earth and software export controls reflect the deepening technological and strategic rivalry between the two powers. The United States had earlier imposed restrictions on the export of advanced semiconductors, chip-making equipment, and AI software to China. Beijing’s latest move is widely seen as retaliation for those measures.

The timing has amplified global uncertainty ahead of a potential meeting between President Xi Jinping and President Trump at the APEC summit in South Korea later this month. Trump has stated, however, that there was “no reason to meet” with Xi after Beijing’s “very hostile” trade actions. His administration had reportedly been preparing a set of countermeasures, including a “massive increase of tariffs,” which has now been officially declared.

The imposition of 100 per cent tariffs could sharply increase costs for American consumers and manufacturers reliant on Chinese imports. It also risks further destabilising global trade flows, especially in sectors such as electronics, machinery, and consumer goods where Chinese supply chains are dominant. Meanwhile, the software export controls could significantly impact the Chinese technology ecosystem, particularly in areas like cloud computing, cybersecurity tools, and embedded systems that rely on U.S.-developed software.

China’s rare earth restrictions, in turn, pose a challenge for industries such as defense, renewable energy, and electric vehicle manufacturing worldwide. These materials are crucial for producing jet engines, precision-guided missiles, magnets, and high-performance batteries. The United States and its allies are now expected to accelerate efforts to diversify their supply chains away from Chinese sources, with possible boosts to domestic mining and processing initiatives in the U.S., Australia, and India.

As both Washington and Beijing expand trade restrictions within days of each other, the situation suggests an imminent fracture of high-tech and industrial supply chains into rival blocs. The mutual tariffs and export controls could escalate into a broader economic standoff impacting investment, global logistics, and the technological competitiveness of both economies. Markets are already expected to react sharply when trading reopens, amid concerns over inflationary pressures and disruptions to manufacturing sectors dependent on cross-border technology flows.

Based On ANI Report