Trump reignites trade war with China with 100% tariff threatening global economy chaos

Donald Trump has warned he will impose export controls on "virtually every product" coming out of China as he threatens to reignite a trade war with Beijing. The US president announced the move on his Truth Social platform on Friday (October 10).

Mr Trump lashed out after Beijing placed restrictions on exports of its rare earths, which are critical for the manufacturing of everything from consumer electronics to jet engines. The escalating tensions between the world's largest economies led to widespread falls on Wall Street, with roughly six out of every seven stocks within the S&P 500 dropping.

In his Truth Social salvo, Mr Trump accused China of taking an "extraordinarily aggressive position" on trade. He said Beijing had sent an "extremely hostile" letter to the world, which he said stated that from November 1 China would impose large scale export controls on virtually every product made by the country "and some not even made by them".

The president, who upended global trade when he announced sweeping tariffs on goods imports into the US in April, fumed that China's move would impact all countries. He added it was "absolutely unheard of" in international trade, and "a moral disgrace" in dealing with other nations.

Mr Trump said that in retaliation the US would impose 100% tariffs on China "over and above" any levy the country already pays as well as export controls on "any and all critical software" from November 1.

He ended his post: "It is impossible to believe China would have taken such an action, but they have, and the rest is History (sic). Thank you for your attention to this matter!"

Mr Trump's shock announcement came after financial markets closed on Friday. It risks throwing the global economy into turmoil again.

It threatens to rekindle the global trade war initiated by Mr Trump. Import taxes heaped on top of the 30% already being levied on Chinese goods could cause trade to break down between the US and China.

While Mr Trump's language sounded definite, he is also famously known for backing down from threats. His doing so led to the acronym "TACO" trade, which stands for "Trump Always Chickens Out".

The prospect of tariffs as large as those announced could worsen the president's own political worries inside the US as they risk pushing up inflation at a time when the job market appears fragile. Fallout from the US government shutdown has already seen federal workers losing their jobs.

China and the US had previously agreed to reduce tariffs after negotiations in Switzerland and the UK. But tensions remain as Beijing has continued to limit US access to difficult-to-mine rare earths needed for a wide array of US technologies.

Beijing on Thursday announced it would require foreign companies to get special approval to ship rare earths abroad. It also announced permit requirements on exports of technologies used in the mining, smelting and recycling of rare earths.

Any export requests for products used in military goods would also be rejected, the Chinese government said yesterday.