Trump vows new China tariffs in response to rare earth export controls

Over the weekend, US President Donald Trump lashed out over China’s sweeping new rare earth export controls.

ICYMI: Last week, China announced expansive new restrictions covering the export, recycling, and processing of rare earth elements.

In a Truth Social post, Trump called China’s new restrictions “sinister and hostile” and vowed to “to financially counter their move” (Truth Social 1).

• Trump also hinted that he would call off a planned meeting with Xi Jinping on the sidelines of the APEC Summit in South Korea later this month.

In a second post, Trump said the US will impose an additional 100% tariff on all Chinese goods and implement export controls on “all critical software” starting November 1 (Truth Social 2).

Quick math: If Trump follows through, that would bring US tariff rates on China imposed since the beginning of his second term to 130%, just a smidge below the 145% we saw in April before the US and China agreed their "trade truce" in May.

But in a third Truth Social Post, Trump appeared to reverse course, writing (Truth Social 3):

• “Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!”

So in conclusion: ¯\_(ツ)_/¯

Get smart: Washington clearly feels sandbagged by Beijing’s new export restrictions, but Trump has already tried and failed to use sky-high tariffs to batter China into submission.

• The effort resulted in outcry from American businesses and an embarrassing climb-down for the US.

Get smarter: China is taking a calculated risk by escalating tensions with the US in hopes of building leverage for upcoming talks – although it now seems unclear whether those talks will even take place.