President Trump threatens 100% tariffs on China, escalating trade tensions

Late last week and into the weekend, momentum appeared to be building towards what could be viewed as another impasse in United States-China trade relations.

The reason for that was related to a social media message posted by President Trump on Friday, stating that, effective November 1, “America will impose a Tariff of 100% on China, over and above any Tariff that they are currently paying. Also on November 1st, we will impose Export Controls on any and all critical software.”

The impetus for this planned action, Trump said, was due to China taking what he described as an extraordinarily aggressive position on trade, in the form of imposing large scale export controls on nearly every product made in China and some not made in China, including rare earth minerals, which a Washington Post report noted are vital for both high-tech and defense supply chains.

“This affects ALL Countries, without exception, and was obviously a plan devised by them years ago,” the post stated. “It is absolutely unheard of in International Trade, and a moral disgrace in dealing with other Nations.”

In response to Trump’s comments, a spokesperson for China’s Ministry of Foreign Affairs said that China firmly rejects the recent U.S. restrictions and sanctions on China, adding it will do what is necessary to protect its legitimate rights and interests.

“Threatening high tariffs is not the right way to deal with China,” said the spokesperson. “The U.S. should correct its approach and act on the common understandings the two presidents reached in their phone calls. The two sides can and should address each other’s concerns through dialogue and manage differences on the basis of equality, respect and mutual benefit to keep bilateral ties on a steady, sound and sustainable track. If the U.S. keeps refusing to change course, China will be firmly resolved in taking measures to safeguard its own legitimate rights and interests.”

Various reports have indicated that while China has not replied in the form of retaliatory tariffs, at this point and that a meeting later this month between President Trump and China’s President Xi Jinping is still planned.

While Trump said the 100% on China would take effect on November 1, reports observed that it is unclear, as to if that is definitive, or if it would be delayed. As previously reported, the countries are nearing the end of a 90-day pause, which is set to expire on November 10, current U.S. tariffs on China at 30% and a 10% tariff on U.S. goods imported to China.

Soon after President Trump’s social media post on Friday, Ben Bidwell, Sr Director of Customs and Compliance at C.H. Robinson, observed that these announcements are typically preliminary steps in standard policy discussions, making it unclear whether or how they will proceed at this point.

“If these new tariffs advance, they would likely be enacted using Section 301 or IEEPA authorities,” said Bidwell. “Section 301 typically takes longer but would avoid implications from this year’s Supreme Court ruling on IEEPA tariffs. Section 232 isn’t on the table since this is a country-wide tariff, not one targeting specific goods. Whether it’s this announcement or the additions under Section 232 a couple of weeks ago, it is clear tariffs are here to stay. The current environment may feel unpredictable to some, but businesses can be proactive versus reactive by building resilient supply chains: consider establishing a sourcing hierarchy, leveraging dual sourcing, exploring bonded warehouses or FTZs, and other strategies. These are conversations we’ve had with customers for years but the current trade landscape has accelerated the occurrences, and many of our customers’ timelines.”

Paul Bingham, Director, Transportation Consulting, for S&P Global Market Intelligence, explained that for these tariffs to apply broadly to all commodities, it appears likely that President Trump would use the IEEPA (International Emergency Economic Powers Act) emergency justification, similar to what was used for reciprocal tariffs earlier this year, based on conversations he had with multiple customs brokers, adding there is no Federal Register announcement, nor other official notification, to importers, regarding the new 100% tariffs.

“Questions regarding details such as the last loading date in China aboard vessels to be able to qualify to be exempt from the new tariffs, or a date by which the imports already shipped have to arrive in the U.S. and clear Customs are all unknown so far,” said Bingham. “Even whether the tariffs will be stacked on top of all existing U.S. import tariffs on goods from Mainland China is not entirely clear, although the consensus was that it is mostly likely these are simplistically going to stack on top of all the existing tariffs. However, similar to other changes in U.S. import tariffs on goods from mainland China this year, expectations seem to be that this 100% level and timing may also be subject to change, perhaps quickly, and depending on what is negotiated. Speculation about a pause to follow or changes in the level of tariffs or to even changes to what goods to which they will apply either before Nov. 1 or after some relatively short period of time of those new tariffs being in place.”

Armada Corporate Intelligence Managing Director Keith Prather noted that this makes an already difficult situation that much more so, saying there are too many moving parts from the Chinese perspective, as they have hit a number of countries and industries with a rare earth registration process—which is new.

“If they follow-through on that premise, that's a big deal and could really put a tough condition on many defense contractors (and even automotive firms that might want to keep a technology secret),” he said. “If Chinese authorities have to know what a specific rare earth material is to be used for, otherwise they threaten stopping the shipment of the material, that's a serious change in the trade environment. But just like Trump, I think Xi has learned to throw an extreme position out there, knowing that he'll negotiate back off of that extreme stance. So, I think they will both ultimately blink, but until then, I'm not sure how seriously to take all of it—but will remain wary of it getting uglier before it gets better. That seems to be the playbook these days.

What’s more, with more Black Swan events (government shutdown, this lingering trade spat with India, China, Mexico, and Canada), a petroleum sector that may be in trouble, slowing corporate spending, and a labor environment that seems to be getting worse (much of which is because of self-fulfilling prophecy—Prather said people can worry themselves into a recession if the negativity takes hold.

“I find myself getting more pessimistic each week that this continues,” he said. “It's creating a much taller headwind and I really thought that Trump and Bessent would want economic conditions to start settling down by now to build momentum into the mid-terms. That doesn't seem to be on their radar—unless they feel that they still have time. And even though the supply chain is reset (with inventories largely in-line), weak demand is still a problem and it seems to be a growing factor that will drag on the industry for the next quarter at least. I think our forecasts are still largely in-line, [and] our models are still showing conditions flat through the end of the year and Q1, and then some momentum kicking-in by the second quarter, a bit more ‘typical’ of historical freight trends.”