US-China trade clash deepens as both sides target critical tech and manufacturing supply chains
A dramatic escalation in US-China trade tensions is sending ripples through global markets and raising fresh concerns for investors and industry leaders alike, as US President Donald Trump unveils a 100 percent tariff on Chinese goods and Beijing tightens its grip on rare earth exports.
According to BNN Bloomberg, Trump acknowledged the unsustainable nature of the tariff but insisted, “They forced me to do that,” after China expanded export controls on rare earth elements—materials critical to the technology sector.
The US president’s response includes not only the steep tariff but also new export controls on “any and all critical software” by November 1, a move that has rattled Wall Street and prompted a cautious rebound in major US stock indexes.
China’s Ministry of Commerce, as reported by CNN, justified the rare earth restrictions as a measure to prevent their use “directly or indirectly, in military and other sensitive fields.”
The new rules require licences for mining, processing, and trading rare earths, and extend to technology containing these elements.
Trump, in turn, described China’s actions as “a rather sinister and hostile move, to say the least,” and accused Beijing of amassing a monopoly position in the rare earth market.
The World Trade Organization has weighed in, with Director-General Ngozi Okonjo-Iweala urging both sides to de-escalate, warning that a prolonged rift between the world’s two largest economies could shrink global output by as much as seven percent over the long term, according to Reuters.
Meanwhile, the Trump administration is quietly adjusting its broader tariff strategy.
The Wall Street Journal reports that dozens of products have recently been exempted from reciprocal tariffs, and more carve-outs are under consideration, particularly for goods not produced in the US.
At the same time, new sector-specific duties are being imposed under Section 232 of the Trade Expansion Act, including a 25 percent tariff on trucks and truck parts and a 10 percent tariff on buses, as detailed by CBC News.
Relief measures have been extended for automakers, with rebates on domestically assembled vehicles and exemptions for North American trade pact-compliant parts.
US Treasury Secretary Scott Bessent expressed hope that “things have de-escalated,” citing ongoing dialogue with Chinese officials, while both Trump and Chinese President Xi Jinping have signalled willingness to meet in South Korea to seek a resolution.
