US-China trade tensions spike as Trump announces new phase - Reuters
Trump begins a new phase of the trade war with China (Illustrative photo: Getty Images)
US President Donald Trump has once again intensified the trade confrontation with China, ending the brief truce between the world’s two largest economies and announcing sharp tariff hikes along with new export restrictions, according to Reuters.
The president announced additional 100% tariffs on imports from China and new export controls on critical software, set to take effect on November 1. These measures are in response to Beijing’s actions, which have tightened export controls on rare earth elements essential for technological manufacturing.
Impact on diplomatic contacts
Amid the new steps in the trade war, the planned meeting with the Chinese leader in South Korea has been called into question. The US president stated that there is currently no reason for the meeting, though the possibility of holding it remains. Beijing has not previously confirmed the talks.
Escalation of the trade war
The US actions represent the largest rift in the past six months between the world’s largest producer and largest consumer of rare earth materials.
Experts predict that the new export restrictions on software and aviation components could deal a serious blow to China’s technology sector, including cloud services and artificial intelligence.
Market reaction
Trade threats have caused significant market instability, heightening concerns about the prospects for the global economy. China controls over 90% of the world’s production of processed rare earth elements and magnets, which are essential for automobiles, aviation, and the defense industry.
The sharp tariff increases and export restrictions signal a new phase in the US–China trade war, showing that the economic truce was unstable and short-lived.
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