China-US Trade War Escalates As Trump Imposes 130% Tariff After Rare Metals Export Ban (TIN)
International News: Since taking office in the White House in January, Donald Trump has taken arbitrary decisions. Most of them are unilateral and dictatorial. While most countries have resisted Trump's actions, China is responding to Trump's actions in his own words. In a surprising move, China tightened export controls on critical rare-earth metals on Thursday. The new restrictions were announced by the Chinese Ministry of Commerce and come ahead of a potential meeting between Chinese President Xi Jinping and US President Donald Trump later this month.
Donald Trump's tariff policies have embroiled the world's largest economies in a trade war. While trade talks are ongoing between the two countries, no results have been achieved. Meanwhile, President Donald Trump has announced that he will impose a 100% tariff on goods imported from China, in addition to the 30% tariff already in effect on or before November 1st. This could further escalate the months-long trade truce between the two countries.
Donald Trump's decision comes after he imposed export controls on China's critical rare earth minerals. Trump also cancelled a meeting with Chinese President Xi Jinping in South Korea later this month. "The United States will impose 100% tariffs on China, in addition to any tariffs China currently pays," Trump said in a post on Truth Social on Friday afternoon. "In addition, starting November 1st, we will impose export controls on all critical software," he added.
The metals whose export restrictions have been imposed by China are used by the US to manufacture sensitive parts of the F-35 stealth fighter jet, electric cars, smartphones, batteries, and many other products in the defense industry. Under the new order issued by the Chinese Ministry of Commerce, five more rare metals, holmium, erbium, thulium, europium, and yttrium, have been added to the export control list. Earlier, seven other metals were banned in April. This means that out of a total of 17 rare metals, China has now imposed export controls on 12 metals. The new restrictions will come into effect from December 1, 2025.
China has cited national security as the reason behind this decision , causing problems for countries around the world, including the US
. China's Ministry of Commerce stated that some foreign organizations and individuals are using Chinese-origin rare earth metals for military purposes, threatening China's security and global stability. A ministry spokesperson stated, "Rare earth metals are dual-use commodities that can be used for both civilian and military purposes. It is international practice to impose controls on them." However, analysts believe that China has taken this action to pressure the US, as doing so will bring the US defense industry to its knees. Specifically, the F-35 fighter jet, Tomahawk missile, radar system, and submarine projects will be severely affected. This policy by China could directly impact the US defense and semiconductor supply chains.
A report by the Center for Strategic and International Studies (CSIS) states that China extracts approximately 60% of the world's rare earth metals and processes up to 90% of them domestically. This means China has almost 100% dominance in this sector. Therefore, China's decision is purely political. It will undoubtedly put the United States under pressure. According to an Al Jazeera report, this decision will have the greatest impact on the United States, as it is the largest buyer from China. According to the USGS, between 2020 and 2023, the United States purchased 70% of its rare earth metals from China, worth approximately $22.8 billion in 2023. Japan, Russia, Hong Kong, and India will also be affected. However, since discussions between India and China on this issue have been ongoing for several months, it is possible that India will not be affected.
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