China has accused the United States of escalating a global trade conflict after Donald Trump threatened to impose a 100% tariff on Chinese goods. Beijing called the threat “a blatant example of double standards” and warned it could retaliate if Washington follows through. A commerce ministry spokesperson said China “does not want a trade war, but will not shy away from one.”
Trump fuels tensions with fresh tariff warning
Trump’s threat came after China tightened export rules for rare earth materials critical to 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. On Sunday, he appeared to soften his tone, posting online: “Don’t worry about China, it will all be fine!” He called Xi “highly respected” and said both nations wanted to avoid an economic crisis.
Financial markets fall amid trade war fears
Global markets reacted sharply to Trump’s comments. On Friday, the S&P 500 index fell 2.7%, its steepest decline since April. Asian markets followed suit. On Monday, the Shenzhen Component Index dropped more than 2.5%, while Hong Kong’s Hang Seng fell around 3.5%. Investors grew concerned that a renewed trade conflict could disrupt global supply chains and slow economic growth.
Fragile trade truce faces new threat
In May, Washington and Beijing agreed to suspend triple-digit tariffs on each other’s goods, providing a brief sense of stability. At that time, U.S. tariffs on Chinese imports had risen by 30%, while China imposed a 10% levy on American goods. Trump’s latest threat now risks dismantling that fragile truce and reigniting broader economic tensions.
China defends export restrictions
China’s commerce ministry issued a written statement accusing the U.S. of abusing export controls and discriminating against Chinese firms. Officials defended China’s restrictions on rare earth exports as “normal and necessary measures” to protect national and global security. “Threats and tariffs are not the way to resolve disagreements,” the spokesperson said. “China seeks cooperation but will respond firmly if provoked.”
Rare earths take center stage
Beijing’s tightening of rare earth exports highlights its control over a critical global resource. China processes nearly 90% of the world’s rare earth elements, essential for smartphones, electric vehicles, and solar panels. Analysts view the move as both a defensive step and a signal of China’s economic leverage in global trade.
Trump-Xi summit hangs in the balance
The recent escalation between Washington and Beijing appears aimed at strengthening negotiating positions ahead of future talks. However, uncertainty now surrounds the planned meeting between Trump and Xi at a summit in South Korea later this month. Both sides appear ready for tough negotiations that could once again reshape global trade relations.
