China has accused the United States of igniting fresh trade tensions after Donald Trump threatened to impose a 100% tariff on Chinese goods. Beijing called the threat “a clear example of double standards” and warned it could retaliate if Washington acts. A commerce ministry spokesperson said China “does not seek a trade war but will never shy away from one.”
Trump escalates tariff conflict with Beijing
Trump reacted sharply after China tightened export rules for rare earth materials essential to advanced industries. He accused Beijing of being “hostile” and trying to hold the world “captive.” The former U.S. president also suggested he might cancel a planned meeting with President Xi Jinping later this month. By Sunday, his tone softened. Trump wrote online: “Don’t worry about China, it will all be fine!” He praised Xi as “highly respected” and said both nations wanted to avoid an economic downturn.
Markets fall as trade fears resurface
Trump’s remarks immediately rattled global markets. On Friday, the S&P 500 index dropped 2.7%, its sharpest fall since April. Asian markets followed quickly. On Monday, the Shenzhen Component Index fell more than 2.5%, while Hong Kong’s Hang Seng declined around 3.5%. Investors feared a renewed trade conflict could disrupt global supply chains and slow economic growth.
Fragile trade truce faces renewed threat
In May, Washington and Beijing agreed to suspend triple-digit tariffs on each other’s goods, providing a brief sense of relief. At that time, U.S. tariffs on Chinese imports had risen by 30%, while China imposed a 10% levy on American products. Trump’s renewed threats now put that fragile truce in jeopardy, raising fears of a new round of trade tensions.
Beijing defends policies and hits back
China’s commerce ministry issued a written statement accusing the U.S. of abusing export controls and targeting Chinese firms unfairly. Officials defended China’s rare earth export rules as “necessary measures” to protect national and global security. “Tariff threats are not the way to solve disputes,” the spokesperson said. “China seeks dialogue but will respond firmly if challenged.”
Rare earths emerge as strategic leverage
Beijing’s tightening of rare earth exports underscores 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 said the move signals China’s economic leverage and its readiness to protect key industries.
Trump-Xi summit uncertain amid rising tensions
The escalating rhetoric between Washington and Beijing appears designed to strengthen each side’s negotiating position ahead of future trade talks. However, uncertainty now surrounds the planned meeting between Trump and Xi at a summit in South Korea later this month. Both leaders are preparing for tough negotiations that could once again reshape global trade relations.
