China has accused the United States of triggering renewed trade tensions after Donald Trump threatened a 100% tariff on Chinese goods. Beijing described the move as “a clear example of double standards” and warned it could retaliate if Washington follows through. A spokesperson for China’s commerce ministry said the country “does not seek a trade war but will not hesitate to defend its interests.”
Trump heightens pressure on Beijing with tariff threat
Trump responded after China tightened export rules for rare earth materials essential to advanced industries. He accused Beijing of acting “hostile” and attempting 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. By Sunday, Trump softened his tone, posting online: “Don’t worry about China, it will all be fine!” He praised Xi as “highly respected” and said both countries wanted to prevent an economic downturn.
Markets react sharply to trade fears
Trump’s remarks rattled global financial markets. On Friday, the S&P 500 index fell 2.7%, its steepest decline since April. Asian markets mirrored the drop. On Monday, China’s Shenzhen Component Index fell more than 2.5%, while Hong Kong’s Hang Seng dropped about 3.5%. Investors feared a renewed trade conflict could disrupt global supply chains and slow economic growth.
Fragile trade truce under threat
In May, Washington and Beijing agreed to suspend triple-digit tariffs on each other’s goods, temporarily easing tensions. At the time, U.S. tariffs on Chinese imports had risen 30%, while China imposed a 10% levy on American products. Trump’s renewed threats now risk unraveling that fragile agreement and raising the prospect of a new economic standoff.
China defends export controls
China’s commerce ministry released a statement accusing the U.S. of abusing export controls and targeting Chinese firms unfairly. Officials defended China’s rare earth export restrictions as “necessary measures” to safeguard national and global security. “Tariffs are not a path to resolution,” the spokesperson said. “China seeks dialogue but will respond firmly if challenged.”
Rare earths emerge as a key bargaining tool
Beijing’s tightening of rare earth exports underscores its control over a crucial global resource. China produces nearly 90% of the world’s rare earth elements, vital for smartphones, electric vehicles, and solar panels. Analysts say the move demonstrates China’s economic leverage and its readiness to protect strategic industries.
Trump-Xi summit uncertain amid rising tensions
The escalation between Washington and Beijing appears designed to strengthen negotiating positions ahead of future trade talks. Yet uncertainty surrounds the planned meeting between Trump and Xi at a summit in South Korea later this month. Both sides are preparing for tough negotiations that could once again reshape global trade dynamics.
