China has accused the United States of destabilising the global economy after Donald Trump threatened to impose a 100% tariff on Chinese imports. Beijing described the move as “a striking example of double standards” and warned it could strike back if Washington takes action. A spokesperson for China’s commerce ministry said the country “will not seek a trade war but will never fear one.”
Trump escalates tension with fresh tariff warning
Trump reacted strongly to Beijing’s decision to tighten export rules for rare earth materials. He accused China of becoming “hostile” and trying to hold the world “captive.” The former U.S. president even hinted he might cancel a meeting with President Xi Jinping scheduled for later this month. Days later, however, his tone softened. On Sunday, Trump wrote online: “Don’t worry about China, it will all be fine!” He called Xi “highly respected” and said both countries wanted to avoid an economic collapse.
Financial markets tumble amid trade fears
Trump’s warning sent markets into a downward spiral. On Friday, the S&P 500 index fell 2.7%, marking its steepest drop since April. Asian markets quickly followed. On Monday, the Shenzhen Component Index lost more than 2.5%, while Hong Kong’s Hang Seng dropped about 3.5%. Investors feared a renewed trade conflict between the world’s two biggest economies.
Trade truce shows signs of collapse
In May, Washington and Beijing had agreed to lift triple-digit tariffs on each other’s goods, offering a short-lived sense of relief. At that time, U.S. tariffs on Chinese products were 30% higher than at the start of the year, while China imposed a 10% tariff on American exports. Trump’s latest threat now risks dismantling that fragile peace.
China rejects U.S. accusations and defends its policy
China’s commerce ministry issued a written statement condemning Washington’s actions. Officials accused the U.S. of abusing export controls and unfairly targeting Chinese firms. They defended China’s rare earth export rules as “reasonable and necessary” for national and global security. “Threatening tariffs will not solve anything,” the spokesperson said. “China’s position is consistent: we prefer dialogue, but we will not yield to pressure.”
Rare earths emerge as Beijing’s strategic leverage
Beijing’s new restrictions on rare earth exports underline its control over a critical global resource. China processes nearly 90% of the world’s rare earths, which are essential for smartphones, electric vehicles, and renewable energy technologies. Analysts view the move as both a protective measure and a reminder of China’s powerful role in global supply chains.
Future Trump-Xi meeting uncertain amid rising tension
The growing hostility between Washington and Beijing appears to be part of a tactical buildup before the next round of trade negotiations. However, uncertainty now surrounds the planned meeting between Trump and Xi at a summit in South Korea later this month. Both leaders seem determined to hold firm, setting the stage for another confrontation that could once again shake the global economy.
