The between the United States and China have flared up once again, after a brief phase of calm, exposing how deep the divide and mistrust between the two giant economies still run.
What began as a simmering disagreement over has now escalated into a full-blown confrontation, with both Washington and Beijing accusing each other of provocation and unfair trade practices.
How it started: China’s rare earth export curbs
The latest round of hostilities began when China announced sweeping new export controls on rare earth metals, critical materials used in semiconductors, electric vehicles, and defense technologies.
Beijing said the move was a national security measure, but many saw it as retaliation for Washington’s tightening restrictions on Chinese technology firms.
Under the new rules, announced by China’s , any company — Chinese or foreign — must now seek Beijing’s approval before exporting products containing more than 0.1% rare earth content by value. The ministry also expanded its list of restricted materials and banned the export of rare earths for foreign military use.
China, which dominates around 90% of the world’s rare earth supply, also introduced extra port fees on US ships from October 14 and launched an antitrust investigation into US chipmaker Qualcomm, signaling a broader retaliation.
Washington hits back: Trump’s tariff storm
The move caught Washington off guard. President Donald Trump said he was “blindsided” by Beijing’s actions, especially since relations between the two nations had appeared “very good” in recent months.
Trump announced an additional 100% tariff on Chinese goods starting November 1, raising the overall tariff rate on Chinese imports to about 130%.
Washington said the move was in response to China’s "extraordinarily aggressive" new export restrictions on rare-earth minerals. "Based on the fact that China has taken this unprecedented position... the United States of America will impose a Tariff of 100% on China, over and above any Tariff that they are currently paying," the US president posted on Truth Social.
The announcement stunned investors and sent Wall Street tumbling, marking its worst single-day performance in six months.
Beijing’s counterpunch: 'We’re not afraid of a trade war'
China’s ministry of commerce hit back swiftly, accusing Washington of “double standards” and “overstretching the concept of national security” through unilateral export restrictions.
“For a long time, the United States has adopted discriminatory measures against China, imposing unilateral ‘long-arm jurisdiction’ restrictions on a wide range of products,” the ministry said. It added that the US export control list includes over 3,000 items, compared to around 900 on China’s.
The ministry warned, “Threatening high tariffs at every turn is not the right way to engage with China. If Washington persists in acting unilaterally, Beijing will resolutely take corresponding measures to safeguard its legitimate rights and interests.”
“Our position on a tariff war remains consistent, we do not want one, but we are not afraid of one,” the ministry added.
The bigger picture: leverage, technology, and diplomacy
Experts say China is using its dominance in rare earths as leverage to push for broader concessions — not only in trade, but also in areas like Taiwan, advanced semiconductors, and AI development.
“The Chinese saw the leverage they had earlier this year with export controls, so it’s not surprising they would head into these talks to try to stack the deck in their favor,” Jon Hillman, a senior fellow for geoeconomics at the Council on Foreign Relations told Bloomberg.
Meanwhile, Trump’s earlier 90-day truce with China in May, which paused new tariffs and controls, had temporarily calmed markets. But the peace didn’t last long — both sides accused each other of backsliding on promises.
“Among the Chinese media in China, there is a recognition that China holds the levers and is using the levers to substantially weaken our manufacturing sector including semiconductors, AI and defense articles,” Nazak Nikakhtar, a former US commerce department official, said, Bloomberg reported.
“But if you pursue handshake deals, it’s classic game theory: The other side is going to evaluate your response if they renege. And if they think you’re chicken, they’re just not going to adhere to the deal," Nazak added.
What’s next: Uneasy truce, global stakes
Both Washington and Beijing are now using export controls as bargaining chips ahead of their next scheduled meeting in South Korea. However, Trump has hinted the summit might be canceled due to the renewed tensions.
For now, the world’s two largest economies once again stand on the brink of another trade war — one that could reshape global supply chains, shake investor confidence, and test the limits of Trump’s “dealmaking diplomacy.”
China's message is clear: “It won’t bow to US pressure.” The US, meanwhile, insists that China’s “unfair practices” cannot go unchecked.