United States Donald Trump announced that he is going to impose an additional 100 per cent tariffs on US-bound Chinese exports starting November 1.
This would be over and above any other tariffs that China is paying, thus escalating the trade row between the two countries.
Trump said that apart from these tariffs, the US would also levy import controls on “any and all critical software.” The move, the US President said, was in response to China curbing its critical mineral exports.
The two countries had reached a fragile truce in recent days, with Trump announcing a summit with Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation forum starting October 31 in South Korea.
Trump escalates US-China trade row: Key points
• Trump's announcement on Friday came after China, which dominates the market for rare earth elements critical to tech manufacturing, dramatically expanded its export controls.
• In response to this, Trump seemingly called of his summit with Xi, and threatened “massive” new tariffs. The announced tariffs would increase import taxes on many Chinese goods to 130%.
• The situation might be a callback to April, when Trump imposed tariffs of 145% on “Liberation Day”. However, the US President had issued an exemption on electronics after this, subjecting them to 20% tariffs instead, CNN reported. Following Trump's significant hike in tariffs, China's government cut off mineral exports to US companies.
{{/usCountry}}• The situation might be a callback to April, when Trump imposed tariffs of 145% on “Liberation Day”. However, the US President had issued an exemption on electronics after this, subjecting them to 20% tariffs instead, CNN reported. Following Trump's significant hike in tariffs, China's government cut off mineral exports to US companies.
{{/usCountry}}• The tensions cooled down in May, with US and Chinese officials agreeing to lower tariffs. While China brought down taxes on American exports down to 10% from 125%, the US also reduced levies to 30%
• However, tensions have again been bubbling up between the two major economies, with Trump accusing China of not being forthcoming with the supply of rare earth minerals, a critical part of the trade between US and China.
• In response, the US President imposed restrictions on the sale of American technologies to China, including a key Nvidia AI chip. Many of these restrictions were lifted later.
• Following this, the Trump-led administration said it would impose fees on goods carried by Chinese-owned or -operated ships. China responded to this with a similar plan, imposing new port fees on US ships, which took effect from Friday.
• Another critical issue is China's moratorium on the purchase of US soybeans, which negatively affects American farmers, Bloomberg reported. Trump had earlier touted the possibility that he could convince Xi to purchase US soybeans.