Trump Announces New 100% Tariff Plan Against China
- Donald Trump’s 100% China tariff plan led to market sell-offs and crypto losses.
- Rare earth export limits from Beijing increased supply chain and technology concerns.
- Uncertainty over the Trump and Xi meeting signals a deeper strain in trade relations.
A sweeping escalation in U.S.–China trade tensions hit global markets late Friday after President Donald Trump announced a 100% tariff on all Chinese goods. This followed what he described as a “hostile” letter from Beijing outlining new export controls to take effect on November 1, 2025. The move led to immediate sell-offs across equities and digital assets as traders reacted to the timing and scope of the threat.
Rare Earths and Software Restrictions
Trump said on his Truth Social that China plans to impose broad export limits covering nearly every manufactured product and some products not even produced domestically. He called the decision “unheard of” and argued it targets every country. As a response, the president pledged a tariff increase starting November 1, “or sooner,” along with export controls on critical software.
According to his post, the United States will enforce duties “over and above” existing tariffs. He accused Beijing of attempting to hold global markets “captive” through its control of rare earths and related materials. He also warned of further countermeasures if China escalates its stance or introduces new restrictions.
Beijing recently expanded its export control list by adding five rare earth materials. These elements are used in electric vehicles, military equipment, and advanced computing hardware. China processes more than 90% of the world’s rare earth supply, giving it leverage in technology and defense supply chains.
Market Reaction and Crypto Shock
The announcement led to broad sell-offs across major U.S. indexes. The S&P 500 dropped by 2.7%, its worst session since April. The Dow Jones Industrial Average slid by 1.9%, and the Nasdaq Composite fell by 3.6%.
Nvidia, valued at $2.5 trillion, lost almost 5% during the session. International markets also pulled back, with the FTSE 100 slipping 0.9% in London. The crypto sector faced one of the largest immediate reactions. As reported by CryptoRus, up to $670 billion in market value was erased.
Traders braced for prolonged tensions tied to rare earth supply risks and upcoming software restrictions. The report noted that the dollar has dropped more than 10% year to date, while the Federal Reserve prepares rate cuts amid cooling labor data.
Related: Crypto Crash Triggers $19B Liquidation in Just 24 Hours, Here’s Why
Diplomatic Strain and Shifting Trade Terms
Trump threatened to cancel a planned meeting with Chinese President Xi Jinping in South Korea later this month. He told reporters there was “no reason” to proceed after Beijing’s latest export policy update. Later in the day, he said the meeting was not formally canceled but remained in doubt.
The announcement renewed fears of a broader trade war. Earlier this year, talks between Washington and Beijing produced a partial easing of elevated tariffs. U.S. duties had surged to 145% at their peak, while China raised its own tariffs to 125%. Negotiations eventually reduced U.S. import duties to 30% and lowered Chinese tariffs to 10%.
Trump framed the new tariffs as retaliation for Beijing’s move on rare earths. He described the letter from Chinese officials as “aggressive” and said it confirmed long-held suspicions about state planning. He emphasized that the new measures would begin on November 1 but could be accelerated if China acts sooner.
In another part of his statement, Trump said export controls on U.S. software would take effect on the same date. He argued that the restrictions were necessary to protect key sectors and ensure leverage during negotiations. He also said additional tools were under review through federal agencies.
Meanwhile, Friday’s announcement widened the gap between Washington and Beijing after months of relative calm. Financial markets responded with broad declines as investors tracked rare earth supply risks and software restrictions. The potential delay of a Trump-Xi meeting adds uncertainty ahead of the November deadline.
