The US-China trade war has reached a fresh level of drama. US President Donald Trump has raised the stakes by proposing an additional 100% tariff on Chinese imports, on top of already existing tariffs. If implemented, the combined tariff burden could push effective rates close to an astonishing 130%. For manufacturers and suppliers, this sounds like a recipe for disaster.
Beijing was quick to respond, accusing Washington of double standards. Chinese officials pointed out that the US currently restricts more than 3,000 export items, compared to just 900 on China’s list. The exchange of accusations centered on claims of “weaponizing national security” underscores the intensified economic confrontation.
In signature style, Trump claimed that China is essentially “holding the world hostage” through its dominance in rare earth elements, critical materials that power everything from smartphones to missiles.
The market response to the renewed tensions was swift and sharp. The S&P 500 dropped by 2.7%, while the Nasdaq shed 3.5%.
Adding to the volatility, Trump hinted that he might skip a highly anticipated meeting with Chinese President Xi Jinping at the upcoming APEC summit. “I haven't canceled, but I don't know that we're going to have it. But I'm going to be there regardless, so I would assume we might have it,” the US president remarked cryptically. For markets and analysts, the negotiation drama is increasingly starting to resemble a long-running political thriller, packed with cliffhangers and plot twists.
Some analysts believe that China is deliberately escalating pressure in the hope of resetting the negotiation narrative. They speculate that Beijing may even be open to concessions in order to maintain dialogue. For now, however, the ball is in Washington’s court. Following Beijing’s forceful statements, the official tone of US social media messaging took a strikingly contradictory turn: “The US wants to help China, not hurt it.”
