America and China have been at odds for years. And things are poised to boil over.
Now Trump made a surprising announcement about China that changes everything.
Trump’s Tariff Reversal Signals De-Escalation
In a surprising pivot, President Trump sought to dial back the escalating trade friction with China on Sunday, just days after vowing to slap a blanket 100% tariff on every import from the country as payback for Beijing’s fresh restrictions on exports.
“Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment,” Trump wrote in a Truth Social post.
“He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!” he wrote.
This conciliatory message came right after a stern rebuke from Beijing that morning, where China’s Commerce Ministry cautioned against “threats” from Washington and pledged to “resolutely take corresponding measures” should the tariffs proceed.
“We do not want a tariff war, but we are not afraid of one,” the ministry said, calling tariff threats “not the correct way to get along with China.”
Trump had unveiled the aggressive tariff plan on Friday, even hinting at scrapping his scheduled October 29 summit with President Xi Jinping.
Roots of the Renewed Trade Clash
The latest flare-up stemmed from a Thursday directive from China’s Commerce Ministry, mandating approvals for exporting goods that incorporate or rely on rare-earth minerals—key ingredients in batteries, semiconductors, and magnet-based tech.
Trump argued this move could cripple global growth by choking off vital parts for critical supply chains worldwide.
The regulation demands licenses from other countries for shipments containing over 0.1% rare earths, intensifying the ongoing semiconductor skirmish with the U.S. that fuels everything from smartphones and laptops to AI data centers.
China dominates the market, churning out about 90% of the planet’s rare-earth minerals essential for these technologies, as reported by The Wall Street Journal.
Wall Street’s Wild Ride and Washington’s Resolve
Friday’s tariff bombshell sent American markets into a tailspin, with the Dow Jones Industrial Average cratering 878 points—a 1.9% slide to 45,479.60. The S&P 500 tumbled 2.7%, and the Nasdaq, loaded with tech stocks, cratered 3.6%, marking the steepest one-day plunges for all three benchmarks since April.
Trump gave Beijing a November 1 deadline to reverse direction.
Echoing the tough line, Vice President JD Vance defended the strategy during a Fox News Sunday Morning Futures spot, framing it as a core security priority.
“It’s going to be a delicate dance, and a lot of it is going to depend on how the Chinese respond. If they respond in a highly aggressive manner, I guarantee you the President of the United States has far more cards than the People’s Republic of China,” Vance said on air Sunday.
China’s Commerce Ministry also ripped the U.S. for brushing off its grievances by rolling out new docking charges on Chinese vessels starting Tuesday—prompting Beijing to fire back Friday with equivalent fees on U.S. ships.
