President Donald Trump has announced a sweeping new phase in the US-China trade conflict, declaring a 100% tariff on all Chinese imports effective November 1, 2025, or possibly sooner. He also announced new export restrictions on advanced technology and semiconductor-related equipment to limit US technology flow to China, marking one of the most aggressive trade actions of his administration.

Speaking at a press conference at the White House, Trump said the measures were designed to “protect American workers, secure national security, and counter China’s economic aggression.” He accused China of weaponising global supply chains, particularly those related to rare earth elements—critical materials used in manufacturing electronics, batteries, and defence technologies.

According to Trump, Beijing has been sending letters to multiple countries, warning that it may soon impose export controls on every stage of production involving rare earth elements, from mining to refining and component manufacturing. He claimed that this amounted to “economic blackmail aimed at controlling the world’s production capacity.”

Trump’s Justification: “Defend America’s Future”

During his remarks, Trump said that the United States could no longer remain dependent on China for essential minerals and technology inputs. He emphasised that his government would “defend America’s economic sovereignty” and ensure supply chain independence by investing heavily in domestic manufacturing and allied trade networks.

He stated, “For decades, China has taken advantage of weak American leadership. They’ve stolen our jobs, controlled our minerals, and manipulated global markets. That ends now.”

Trump said the tariffs would cover all categories of Chinese imports, including electronics, machinery, steel, textiles, and consumer goods. The policy also includes expanded restrictions on technology exports, particularly those related to artificial intelligence, advanced chips, and communication systems.

Under the new order, US companies will require government approval before exporting advanced technology components to any Chinese entity. This move mirrors earlier restrictions under the Trump administration’s previous term, when companies like Huawei and ZTE faced bans and export controls.

Rare Earths: The New Frontline of Economic Warfare

The President’s announcement comes amid growing tensions over rare earth elements (REEs), which are essential for producing semiconductors, electric vehicles, renewable energy systems, and defence technologies.

China currently controls over 70% of the world’s rare earth production and refining capacity. Recent reports from intelligence agencies suggest that Beijing has been preparing to restrict exports of certain key minerals as leverage in trade negotiations.

Trump accused China of trying to intimidate smaller nations by sending formal letters warning of new export rules, which would require global companies to seek Chinese permission to use rare earths in industrial production.

He said, “They are trying to control every single link of the global production chain—from mining to magnets. The United States will not tolerate that.”

The White House announced a new executive order under which the US government will accelerate domestic rare earth mining projects, especially in states like Nevada, Texas, and Wyoming, and increase strategic partnerships with allied nations such as Australia, Canada, and India to secure alternative supply chains.

Global Reactions and Market Shock

Trump’s announcement immediately rattled global markets. The Dow Jones Industrial Average fell by nearly 400 points in early trading following the statement, while Asian markets reacted sharply, with China’s Shanghai Composite Index dropping over 2.8%.

Chinese Foreign Ministry spokesperson Mao Ning responded swiftly, condemning Trump’s move as an act of “economic coercion” and “unilateral protectionism.” In a statement, she said, “The United States is undermining free trade principles and destabilising global supply chains. China reserves the right to take all necessary countermeasures.”

Beijing’s state-run media, including Global Times and People’s Daily, described the tariffs as “a political stunt designed to boost Trump’s domestic standing ahead of the 2026 elections.” Analysts warned that China could retaliate by imposing its own tariffs on American agricultural and energy exports, or by tightening control over rare earth exports, which would further pressure the global tech industry.

Meanwhile, European Union officials called for restraint and dialogue, fearing that a full-blown trade war could destabilise the global economy and worsen inflation across multiple regions.

Economic Impact: A Global Domino Effect

Experts warn that a 100% tariff on Chinese imports could have far-reaching effects on global supply chains, consumer prices, and technological innovation.

According to Oxford Economics, the tariffs could raise the cost of consumer goods in the United States by up to 12%, as companies struggle to source cheaper alternatives. Products like smartphones, laptops, solar panels, and electric vehicle batteries—many of which depend on Chinese components—are expected to see significant price hikes.

Economist Dr. Emily Rhodes from the University of Chicago said, “This is the most extreme tariff policy in modern US history. If fully implemented, it could trigger retaliatory actions from China, and smaller economies will get caught in the crossfire.”

The World Trade Organization (WTO) has also raised concerns, warning that blanket tariffs violate international trade rules and could escalate into a multi-front trade conflict.

Trump’s Political Motive and Domestic Strategy

Political analysts believe Trump’s tariff announcement is also a strategic domestic move. Facing political challenges ahead of the 2026 midterm elections, Trump has been amplifying his message of “America First” and economic nationalism.

By taking a strong stance against China, Trump aims to rally his voter base and portray himself as the only leader capable of defending American jobs and industries.

His spokesperson Steven Cheung reaffirmed this position on X, writing: “President Trump is putting America first again. The era of cheap Chinese imports and economic manipulation is over.”

Public reaction within the United States remains divided. Manufacturers and trade unions largely support the move, viewing it as a protective measure for domestic industries. However, retailers, importers, and tech firms warn that the tariffs will increase production costs, forcing higher prices for American consumers.

Technology Sector at Risk

The technology sector is expected to face the harshest consequences from the export restrictions and tariffs.

Under the new policy, US firms involved in semiconductor equipment, quantum computing, and advanced AI systems will be barred from selling technology to Chinese companies without a special licence.

Major companies such as NVIDIA, Intel, and AMD could lose billions in potential revenue as access to the Chinese market—one of their largest—is restricted.

China, in turn, may accelerate its indigenous chip production and increase investments in state-backed research programmes to reduce dependence on American suppliers.

Industry experts predict that the US-China technology decoupling will now progress faster than anticipated, potentially splitting the global tech ecosystem into two competing blocs—one led by Washington and the other by Beijing.

Rare Earth Alliances and Strategic Countermeasures

The White House also announced a new “Global Rare Earth Security Initiative” (GRESI) to ensure long-term access to critical minerals. The initiative will focus on joint mining ventures, strategic reserves, and research collaborations with partners like India, Australia, Japan, and Canada.

Trump said, “Together with our allies, we will create a supply chain that no country can hold hostage.”

Analysts believe this move could reshape global trade in rare earth materials, reducing China’s dominance in the sector. However, developing new mines and refining infrastructure could take five to seven years, meaning short-term supply disruptions remain likely.

China’s Expected Response

Experts believe China could respond through three primary measures:

1. Restricting rare earth exports to the US and its allies.

2. Imposing tariffs on key American products like soybeans, LNG, and aircraft parts.

3. Accelerating yuan devaluation to make its exports more competitive.

Chinese state outlets hinted that retaliation would be “measured but firm.” Economists in Beijing said that the United States had overestimated its ability to isolate China and warned of mutually destructive outcomes.

The Future of Global Trade Relations

The latest announcement marks a turning point in global economic relations. With the US and China now effectively locked in a tariff and technology war, countries around the world are preparing for long-term instability in trade, investment, and innovation.

Emerging markets such as India, Vietnam, and Indonesia may benefit as companies seek alternative manufacturing bases. However, the transition will take time, and costs for businesses and consumers are expected to rise globally.

Trump’s move has reaffirmed his protectionist economic doctrine, framing trade policy as a tool of national security rather than global cooperation.

As the November deadline approaches, the world will be watching closely to see whether China retaliates, negotiates, or chooses to wait until the US elections to recalibrate its economic strategy.

For now, one thing is clear: a new era of economic confrontation between the world’s two largest economies has begun, and its effects will ripple across every continent.

Join our Telegram Channel for Latest News and Regular Updates.

Start your Mutual Fund Journey  by Opening Free Account in Asset Plus.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.