The delicate three-month ceasefire between the United States and China is under pressure after Beijing introduced extensive export restrictions on essential minerals and key resources crucial to America’s technology and defence sectors.
The move comes just months after President Donald Trump negotiated a temporary agreement to delay fresh tariffs and restrictions.
Trump responded with a forceful post on Truth Social, threatening a 100% tariff increase on Chinese goods starting November 1. He also announced plans to impose new export controls on advanced software.
The shift in tone spooked markets, triggering steep sell-offs on Wall Street.
The US-China trade truce, brokered in May, had paused implementation of new duties and export bans. But tensions lingered due to China sharply reducing imports of US soybeans, a move seen in Washington as strategic pressure.
The truce period has been relatively calm until now.
In response, analysts say China aimed to regain leverage in ongoing negotiations by controlling access to minerals and materials in the supply chain.
These resources are key not only to defence manufacturing but also to semiconductors and emerging technologies.
Experts warn that Trump’s approach of deal-by-deal diplomacy may be under strain.
While bold statements can drive headlines, abrupt reversals erode credibility, especially in interactions with a more confident and self-reliant China compared to Trump’s first term.
Markets responded sharply, as US indexes tumbled significantly, with technology and manufacturing shares among the worst affected.
Nvidia, a leading semiconductor giant deeply linked to both nations, slipped by nearly 5%.
The sudden market turbulence originated from a brief 500-word message posted by the President.
Observers note the US now faces a China that holds greater control over strategic supply chains than before.
That leverage may tilt the balance in forthcoming trade talks.
While some analysts suggest that Trump might postpone or call off his planned meeting with Chinese President Xi Jinping, many believe his tough stance is merely strategic positioning, part of a larger negotiation tactic ahead of their upcoming summit in South Korea.
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