President Donald Trump announced late Friday that the United States will impose an additional 100% tariff on Chinese imports and place new export controls on “any and all critical software” products, starting on November 1. This move comes in response to China’s new export restrictions on rare earth elements, which are critical for high-tech industries and defense.
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In his post on Truth Social, Trump stated that the new tariffs would be applied “over and above any tariff they are currently paying.” This new tariff would raise import duties on many Chinese products to nearly 130%, reviving fears of trade tensions between the world’s two largest economies.
Furthermore, Trump said that China took an “extraordinarily aggressive position” in trade and sent a “hostile letter” to global leaders, detailing large-scale export controls on all Chinese-made products, also set for November 1.
He added, “It is impossible to believe that China would have taken such an action, but they have, and the rest is History.”
The news sent shockwaves through the market, with the earlier threat of retaliation leading to the S&P 500 Index’s (SPX) worst day since April. Trump also suggested that he saw “no reason” to meet with Chinese leader Xi Jinping during his upcoming trip to South Korea.
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