China has accused the United States of provoking global economic instability after Donald Trump threatened to impose a 100% tariff on Chinese goods. Beijing condemned the move as “a blatant display of double standards” and warned it could take retaliatory action. A spokesperson for China’s commerce ministry said the country “will not initiate a trade war but will never back down from one.”
Trump’s threat reignites tariff tensions with Beijing
Trump’s outburst followed China’s decision to tighten export rules on rare earth materials crucial to modern industries. He accused Beijing of turning “very hostile” and of trying to hold the world “captive.” The former U.S. president also hinted that he might cancel a planned meeting with Chinese leader Xi Jinping later this month. But on Sunday, he changed his tone. 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 crisis.
Global markets react with sharp declines
Trump’s latest remarks sent shockwaves through global financial markets. On Friday, the S&P 500 index dropped 2.7%, its biggest fall since April. The downturn quickly spread across Asia. On Monday, the Shenzhen Component Index in mainland China fell more than 2.5%, while Hong Kong’s Hang Seng tumbled by about 3.5%. Investors feared a renewed trade war could derail the fragile global recovery.
Fragile trade peace now at risk
Just months ago, Washington and Beijing had agreed to pause their tariff conflict, lifting triple-digit levies on both sides. At that time, U.S. tariffs on Chinese goods had risen by 30%, while China imposed a 10% tax on American exports. Trump’s renewed threats now endanger that brief period of calm, raising concerns about another escalation in the long-running trade dispute.
Beijing defends policy and accuses Washington of hypocrisy
In a written statement, China’s commerce ministry accused the United States of “overstretching the concept of national security” and using export controls as a political weapon. Officials defended China’s new restrictions on rare earth materials as “reasonable actions” to protect national and global security. “Threats and pressure will not solve disagreements,” the spokesperson said. “China seeks cooperation, not confrontation, but will act firmly if provoked.”
Rare earths become symbol of Beijing’s economic power
Beijing’s tighter export rules highlight its control over a key global resource. China processes nearly 90% of the world’s rare earth elements, essential for producing electric vehicles, smartphones, and solar panels. Analysts see the move as both a defensive measure and a reminder of Beijing’s crucial role in global supply chains.
Future Trump-Xi meeting clouded by uncertainty
The exchange of sharp statements between Washington and Beijing appears to be part of a broader strategy ahead of future 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 maintain a tough stance, heightening fears that their economic rivalry could once again destabilise global markets.
