Trump’s Latest Tariff Threat Sends Shockwaves Through Global Markets
U.S. President Donald Trump has reignited trade tensions with China, threatening to raise tariffs and calling off a planned meeting with President Xi Jinping. The move follows Beijing’s decision to expand export controls on rare earth elements, materials crucial to global technology and defense industries.
The rift, unfolding just three weeks before the two leaders were expected to meet at the APEC summit in South Korea, has already rattled financial markets. The S&P 500 fell by 2% — its sharpest one-day decline since April — while gold prices and U.S. Treasury bonds surged as investors sought safety.
Rare Earths at the Center of the Rift
China’s new policy adds five more rare elements and several refining technologies to its export restriction list, tightening control over a market it already dominates. The country produces over 90% of the world’s processed rare earths, essential for electric vehicles, semiconductors, and military equipment.
Trump accused Beijing of “holding the global economy hostage,” saying on Truth Social that he was considering a “massive increase” in tariffs on Chinese imports. “For every element they control, we have two,” he said, signaling readiness for economic retaliation.
A Potential Trade War Revival
Experts warn that Trump’s comments could mark the beginning of another trade war between the world’s two largest economies. “Trump’s post could be the start of the end of the tariff truce,” said Craig Singleton from the Foundation for Defense of Democracies.
If new tariffs are imposed, both nations could face renewed supply chain disruptions. The United States, meanwhile, has already proposed restricting Chinese airlines and tightening controls on imported Chinese electronics.
Beijing Silent, Washington on Edge
Neither the White House nor China’s embassy in Washington has commented. However, insiders say the FBI and U.S. Trade Representative offices are closely monitoring the situation.
Trump’s administration insists that the U.S. will “financially counter” any hostile trade actions by Beijing. Yet the absence of diplomatic communication raises fears that tensions could escalate quickly.
What’s Next for the Global Economy?
With rare earth materials powering everything from smartphones to fighter jets, even small disruptions can have global effects. Analysts believe this standoff could reshape technology supply chains and push Western nations to invest more heavily in domestic mineral processing.
As Trump doubles down on tariffs and China tightens its grip on key resources, investors and policymakers alike are bracing for impact.
The question now — is this just a trade spat, or the opening move of a new economic cold war?
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