Trump administration threatens new 100% tariff on Chinese exports

US President Donald Trump has announced that he will impose an additional 100% tariff on all Chinese goods imported into the U.S. from next month.

On Friday, Trump announced that he would hit back at Beijing's latest move this week to restrict rare earth exports, accusing China of becoming very hostile and trying to hold the world captive.

Meanwhile, a significant market downturn occurred triggered by President Donald Trump’s threat of major escalation in the trade conflict, with the S&P 500 closing down 2.7%, its most precipitous fall since April.

China predominates in production of rare earths and certain key materials, which are crucial elements in cars, smartphones and several other items.

It has been observed that the last time Beijing tightened export controls after Trump raised tariffs on Chinese goods was earlier this year, it caused an outcry from many US firms reliant on the materials.

Qualcomm, a US-based global leader in the foundational wireless technologies, derives a significant portion of its business from China.

On the contrary, Beijing has also said it will charge new port fees to ships tied to the US, including those operated by US firms.

The US and China have been in a vulnerable trade peace since May, when both parties agreed to reduce the triple-digit tariffs on each other’s goods which had severely restricted trade between the two countries.

The move resulted in US tariffs on Chinese goods totaling a 30% charge compared with the rate at the start of the year while US goods face a new 10% tariff while entering China.

Gracelin Baskaran, the director of the critical mineral's security program at Washington-based Center for Strategic and International Studies, stated that the export rules unveiled this week target foreign defense contractors making them particularly serious.

She further explained, “Nothing makes America move like targeting our defense industry. The US is going to have to negotiate. We have limited options and in an era of rising geopolitical tension and potential conflict we need to build our industrial defense base.”