US President Donald Trump has said that he will place a 100 percent tariff on Chinese exports to the United States, in an escalatory move that could set off a blistering trade war between the world’s two largest economies.
Trump said on Friday that he would ratchet up duties on Chinese goods and impose new export controls on “any and all critical software”, a move that appears to be targeted at China’s tech sector. His announcement follows a series of recent export controls on rare earth metals, imposed by China ahead of upcoming trade talks with the US.
“Based on the fact that China has taken this unprecedented position … the United States of America will impose a Tariff of 100 percent on China, over and above any Tariff that they are currently paying,” Trump said in a social media post, stating that the levies would come into force on November 1 or sooner.
Earlier in the day, Trump had accused China of “trade hostility” and said that he might scrap a planned meeting with his Chinese counterpart Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit, which begins October 31.
In that earlier social media post, Trump had mulled the possibility of strict sanctions in retaliation for China’s export controls regarding rare earth metals.
The US imposed heavy tariffs on Chinese goods earlier in Trump’s presidency, in a bid to address what it depicted as imbalanced trade relations. But those tariffs were eventually eased after the two countries came to an agreement for a 90-day pause that is set to expire around November 9.
The possibility of a full-scale trade war between the US and China has been viewed with alarm by financial analysts and investors around the world, who warn that a confrontation between the two powers could roil global markets and spark a recession.
The relationship between Trump and his Chinese counterpart has been rocky, and both have imposed new measures aimed at countering each other in areas where they are competing for influence, such as technological development.
Rare earth metals are vital for such development, and China leads the world in refining the metals for use in devices like computers, smartphones and military weaponry.
On Thursday, China unveiled a suite of new restrictions on the exports of those products. Out of the 17 elements considered rare earth metals, China will now require export licences for 12 of them.
Technologies involved in the processing of the metals will also face new licensing requirements. Among the measures is also a special approval process for foreign companies shipping metallic elements abroad.
Threats of retaliatory actions
China described the new rules as necessary to protect its national security interests. But in his lengthy post to Truth Social, Trump slammed the country for seeking to corner the rare-earths industry.
The Republican president warned he would counter with protectionist moves and seek to restrict China from accessing industries the US holds sway over. The Trump administration had previously imposed massive tariffs on China, one of the US’s largest trading partners.
The US has previously taken aggressive steps aimed at hobbling China’s tech sector, which it views as a key competitor to its own.
“Our relationship with China over the past six months has been a very good one, thereby making this move on Trade an even more surprising one,” Trump said. “I have always felt that they’ve been lying in wait, and now, as usual, I have been proven right!”
Clash over port fees
The clash over access to rare earth metals was but one front in the escalating economic tensions.
Also on Friday, China announced it would slap “special port fees” on ships built or operated by the US, mirroring similar fees that Washington imposed in April.
The US had framed its version of the fees as a way of discouraging purchases of Chinese vessels. The fees would “send a demand signal for US-built ships”, US Trade Representative Jamieson Greer said at the time.
China will begin to implement its own fees on October 14, according to a statement from its Ministry of Transport. US ships that pass through Chinese ports will be charged 400 yuan — approximately $56 — per net tonne, increasing to 640 yuan or $90 by next April.
Chinese ships arriving at US ports, meanwhile, face a fee of $18 per net tonne or $120 per container, meaning a ship with 15,000 containers could be charged $1.8m.
A Chinese spokesperson told the news agency AFP that the retaliatory fees were necessary to “safeguard” the country’s interests.
“We urge the US side to immediately correct its wrongful practices and cease its unwarranted suppression of China’s shipping industry,” the spokesperson said.