President Trump just dropped a trade bombshell that could shake the global economy to its core.
Breitbart reported that on Friday, Trump declared a staggering 100% additional tariff on Chinese imports and new export controls on critical software, effective November 1, 2025, in retaliation for China’s aggressive restrictions on rare earth minerals.
Let’s rewind a bit to set the stage for this economic showdown. Earlier in 2025, the U.S. and China had hashed out a tariff truce, lowering U.S. duties on Chinese goods from a peak above 140% in April to a still-hefty average of 57.6%. That fragile peace didn’t last long, as China’s latest moves have reignited tensions.
Just one day before Trump’s announcement, China’s Ministry of Commerce unveiled stringent export controls on rare earth elements, lithium batteries, and related tech, set to kick in early November 2025.
These rules are no small matter—foreign companies must now secure licenses for products with even 0.1% of Chinese rare earth content or tech.
Why does this matter? China processes about 90% of the world’s rare earths, materials vital for semiconductors, electric vehicles, and military gear, giving Beijing a chokehold on global supply chains.
Back in April 2025, China tightened similar controls, sending shockwaves through the auto and defense industries. While restrictions eased after U.S.-China talks in the U.K. and Europe, this latest round could be even more disruptive, as tech firms scramble to prove compliance with that microscopic 0.1% threshold.
Trump didn’t mince words in response, announcing, “It has just been learned that China has taken an extraordinarily aggressive position on Trade in sending an extremely hostile letter to the World, stating that they were going to, effective November 1st, 2025, impose large scale Export Controls on virtually every product they make, and some not even made by them.”
Let’s unpack that—China’s not just playing hardball; they’re swinging a wrecking ball. Trump’s tariffs could push average U.S. duties on Chinese goods above 150%, a gut punch to Beijing’s export machine.
Adding fuel to the fire, Trump scrapped a planned meeting with Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation summit in South Korea later in October 2025.
This cancellation is a blow to Xi, who’s been pushing for dialogue, but it signals Trump isn’t in the mood for pleasantries.
Reports from The Wall Street Journal suggest China thought it had the upper hand, believing recent U.S. responses to trade threats were weak.
Some Chinese officials even saw the U.S. government shutdown over budget disputes as a sign of disarray, emboldening their hardline stance.
Big mistake. Trump’s swift reaction, including export controls on “any critical software” starting November 1, 2025, shows he’s not backing down, and China may have overplayed its hand.
Let’s not forget the U.S. still holds serious cards in this game. American companies and allies control over 90% of global semiconductor equipment manufacturing, while China remains dependent on foreign advanced chips for AI and military tech.
China’s not sitting idly by, either—they’ve slapped new port fees on U.S. ships and launched an antitrust probe into U.S. chipmaker Qualcomm. It’s clear both sides are digging in for a prolonged fight.
As one analyst told The Wall Street Journal, China’s actions are “an economic equivalent of nuclear war—an intent to destroy the American AI industry.” That’s a chilling assessment, and while hyperbole might be at play, the stakes couldn’t be higher for U.S. tech and defense sectors.