Trump threatens new 100% tariff on Chinese imports starting 1 November or sooner

US President Donald Trump has threatened to impose an additional 100% tariff on Chinese imports starting on 1 November or sooner, potentially escalating rates after months of a trade truce between the two countries.

In a post on Truth Social, Trump also said his administration "will impose export controls on any and all critical software."

Trump expressed frustration with China after it placed new export controls on rare earth elements, which are needed in a broad range of products, from jet engines, radar systems and electric vehicles to consumer electronics including laptops and phones.

Trump called the move "extremely hostile" and suggested he may call off a meeting scheduled with Chinese leader Xi Jinping later this month in South Korea. He said on social media that "there seems to be no reason" to meet with Xi.

He later told reporters that while he had not cancelled his meeting, he doesn't "know that we're going to have it," adding that "I'm going to be there regardless, so I would assume we might have it."

Trump also suggested there may be time to ratchet down his steep new tariff threat. “We’re going to have to see what happens. That’s why I made it 1 November,” he said.

China's new restrictions

China accounts for nearly 70% of the world’s rare earths mining. It also controls roughly 90% of global rare earths processing. Access to such materials is a key point of contention in trade talks between Washington and Beijing.

The exports controls announced on Thursday require foreign companies to get special approval for shipping the metallic elements abroad.

It also announced permitting requirements on exports of technologies used in the mining, smelting and recycling of rare earths, adding that any export requests for products used in military goods would be rejected.

Trump said China is holding the world "captive" by restricting access to the metals and magnets used in electronics, computer chips, lasers, jet engines and other technologies.

The S&P 500 tumbled 2.7% on worries about the rising tensions between the world’s largest economies. It was the market’s worst day since April when the president last bandied about import taxes this high. Still, the stock market closed before the president spelled out the terms of his threat.

Not only could the global trade war instigated by Trump be rekindled, but import taxes being heaped on top of the 30% already being levied on Chinese goods could, by the administration’s past statements, cause trade to break down between the US and China in ways that could cause growth worldwide to slump.

While Trump's wording was definitive, he is also famously known for backing down from threats. Earlier this year, some investors began engaging in what the Financial Times called the “TACO” trade, which stands for “Trump Always Chickens Out.”

The United States and China have been jostling for advantage in trade talks, after the import taxes announced earlier this year triggered the trade war.

Both countries agreed to ratchet down tariffs after negotiations in Switzerland and the United Kingdom, yet tensions remain as China has continued to restrict America's access to the difficult-to-mine rare earths needed for a wide array of US technologies.