President Donald Trump on Friday threatened to place an additional 100 per cent tax on Chinese imports starting on November 1 or sooner, potentially escalating tariff rates close to levels that in April fanned fears of a global recession.
The president expressed frustration with new export controls placed on rare earth elements by China — and said on social media that “there seems to be no reason” to meet with Chinese leader Xi Jinping as part of an upcoming trip to South Korea.
Trump later told reporters he had not cancelled his meeting. “But I don't know that we're going to have it,” he said during an Oval Office appearance on another subject. “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 Nov. 1,” he said.
On Thursday, the Chinese government restricted access to rare earth minerals, requiring 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.
On social media, Trump described the export controls as “shocking” and “out of the blue.” He said China is “becoming very hostile” and that it's holding the world “captive” by restricting access to the metals and magnets used in electronics, computer chips, lasers, jet engines and other technologies.
Trump said in a post that “starting November 1st, 2025 (or sooner, depending on any further actions or changes taken by China), the United States of America will impose a Tariff of 100% on China, over and above any Tariff that they are currently paying.” The president also said the US government would respond to China by putting its own export controls “on any and all critical software” from American firms.
The Chinese Embassy in Washington did not immediately respond to an Associated Press request for comment.
Trump is known for using threats as a tactic.
Trump also said, the United States could impose export controls on Boeing plane parts as part of Washington's response to Chinese export limits on rare earth minerals.
Trump has frequently used Boeing in his aggressive efforts to reshape global trade since taking office in January. During clashes with Trump over trade, Beijing in April ordered Chinese airlines to temporarily stop taking deliveries of new Boeing jets. The planemaker has also landed several large sales from foreign carriers following visits by Trump.
"We have many things, including a big thing is airplane. They (China) have a lot of Boeing planes, and they need parts, and lots of things like that," Trump told reporters at the White House, when asked what items could the U.S. impose export controls on.
The planemaker is in talks to sell as many as 500 jets to China, Bloomberg reported in August. It would be the U.S. planemaker's first major Chinese order since Trump's first term in office.
Even if that falls through, the financial hit to Boeing will likely be small, said Scott Hamilton, an aerospace analyst with Leeham Co. "It's sandpaper on Boeing's hide."
Historically, China made up as much as 25% of Boeing's order book, but today it is less than 5%.
Chinese airlines have orders for at least 222 Boeing jets, according to Cirium, an aviation analytics company. The country has 1,855 Boeing airplanes in service. The vast majority of planes on order and in service are Boeing's popular 737 single-aisle jet.
A ban on spare parts or exports would also hit CFM International, the joint venture between GE Aerospace and France's Safran, which makes the LEAP engine used on the Boeing 737 MAX.
While Trump's wording is 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 prospect of tariffs this large could compound the president's own political worries, potentially pushing up inflation at a moment when the job market appears fragile and the drags from a government shutdown are starting to compound with layoffs of federal workers.
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.
Analysts say there's time to de-escalate
Trump did not formally cancel the meeting with Xi, so much as indicating that it might not happen as part of a trip at the end of the month in Asia.
The trip was scheduled to include a stop in Malaysia, which is hosting the Association of Southeast Asian Nations summit; a stop in Japan; and a visit to South Korea, where he was slated to meet with Xi ahead of the Asia-Pacific Economic Cooperation summit.
As reported by AP, Sun Yun, director of the China program at the Stimson Center, said Beijing's move was a reaction to US sanctions of Chinese companies this week and the upcoming port fees targeting China-related vessels — but said there's room for de-escalation to keep the leaders' meeting alive. “It is a disproportional reaction,”
Sun said. “Beijing feels that de-escalation will have to be mutual as well. There is room for manoeuvre, especially on the implementation.”