China has vowed to retaliate if US President Donald Trump follows through on his threat to impose new 100% tariffs on Chinese imports, escalating a trade dispute that has already shaken global markets.
The warning, issued by the Ministry of Commerce on Sunday, marks Beijing’s first official response since Trump accused China of “becoming very hostile” following its decision to tighten export restrictions on rare earth minerals.
“Resorting to threats of high tariffs is not the right way to engage with China,” the ministry said. “If the US persists in acting unilaterally, China will resolutely take corresponding measures to safeguard its legitimate rights and interests.”
Beijing defended its new rare earth export rules as a “legitimate move,” saying Washington had triggered the standoff by expanding trade restrictions against Chinese firms and imposing special port fees on ships linked to China.
The flare-up threatens to derail months of progress in delicate trade talks between the world’s two largest economies. Trump and Chinese President Xi Jinping were expected to meet later this month in South Korea, but the US leader has since cast doubt on the meeting.
Financial markets reacted sharply to the renewed tensions, with the S&P 500 dropping nearly 2% on Friday amid investor fears of another tariff war reminiscent of early 2025, when both countries imposed duties exceeding 100% on each other’s goods.
Beijing’s rare earth export restrictions, announced last week, expand the list of controlled minerals and curb their use in foreign manufacturing, including defense and semiconductor production. Analysts say the move could disrupt supply chains for critical materials used in electronics, automobiles, and advanced weaponry.
“The US actions have seriously harmed China’s interests and undermined the atmosphere of bilateral economic and trade talks,” the ministry said, accusing Washington of “double standards” for imposing similar semiconductor restrictions on China.
Experts say Beijing’s tactics mirror Washington’s long-standing export controls on advanced technologies made with US equipment, a signal that China is ready to fight back using the same tools.
On Truth Social, Trump described Beijing’s move as “extremely hostile” and a “moral disgrace in dealing with other nations.”
Despite the rhetoric, observers say both sides may still return to the negotiating table before the new tariffs or export curbs take effect.
