US-China Trade War Escalates as Trump Threatens 100% Tariffs

A new phase in the US-China trade war is escalating rapidly. US President Donald Trump has threatened to impose 100% tariffs on Chinese goods. This follows China’s recent restrictions on the export of rare-earth minerals.

The situation creates a high-stakes standoff between the world’s two largest economies. Both sides are now waiting for the other to make the next move.

Posturing and Preparation for High-Level Talks

US Treasury Secretary Scott Bessent confirmed communications continued over the weekend. He stated a meeting between Trump and Chinese leader Xi Jinping is still expected to happen. Staff-level meetings are also anticipated this week to lay the groundwork.

According to Reuters, Bessent described the situation as “China versus the world.” He warned of “straight brute force countermeasures” if Beijing does not change its position. The Trump administration is also mobilizing allies to increase pressure.

Economic Resilience and Strategic Leverage

Markets have so far reacted with cautious optimism. Investors appear to view the threats as strategic posturing. The S&P 500 saw its best day since May, while Chinese markets showed relative resilience.

Analysts believe China’s export sector can withstand tariffs up to 50%. The real pressure would come if tariffs surpass 100%. China’s latest trade data shows exports growing at their fastest pace in six months, softening the immediate impact.

The core issue remains which nation will concede first. The escalating 100% tariffs threat marks a critical juncture in this prolonged economic conflict. Both leaders face significant domestic pressures that could influence their next steps.

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What are rare-earth minerals and why are they important?

Rare-earth minerals are a group of 17 elements critical for manufacturing high-tech devices. They are essential for producing everything from smartphones and electric vehicles to military equipment. China currently dominates the global supply chain for these materials.

How have financial markets reacted to the new tariff threats?

Surprisingly, markets have shown resilience. The S&P 500 index closed 1.6% higher, its best performance since May. This suggests investors may see the threats as negotiation tactics rather than a definitive path to economic rupture.

What is the status of the planned Trump-Xi meeting?

As of Monday, US officials stated the meeting between the two leaders is still expected to proceed. Treasury Secretary Bessent indicated that staff-level meetings would happen first to prepare for the high-level discussions and seek potential concessions.

What other actions has the US taken recently against China?

Beyond tariffs, the US has moved forward with imposing port fees on Chinese ships. It has also removed a waiver that allowed major chipmakers to maintain some of their operations in China, tightening technology export controls.

Why is China confident in facing these tariff threats?

Analysts note China believes its economy is better positioned to absorb trade war shocks. Strong recent export growth provides a buffer. Chinese leadership may also calculate that US political pressures, like upcoming elections, give them leverage.