US China trade war heats up as Trump warns 200% tariff threat

Trump’s 200% tariff warning adds new tension to US China trade war

In a fresh twist to the US China trade war, U.S. President Donald Trump has warned China of a massive 200% tariff if Beijing refuses to export rare-earth magnets to America. 

Source: Kobeissi Letter

This threat comes at a sensitive time as both the nations agreed to extend their trade truce. Here’s what’s going on and why it matters.

Trade Truce Extended – But Tensions Remain

On August 12, US China decided to extend their trade truce by 90 days and give the negotiators more time to resolve long-standing disputes. Since April, Washington has repeatedly raised tax on Chinese goods with some duties going as high as 145%.

Most Chinese imports currently face a 30% tax while Beijing hit back with a 10% levy on U.S. products.

So, even though the US China trade war is on pause, the tensions are still stirring quietly especially around rare-earth materials. 

Why Trump Threatened a 200% Tariff on Chinese products ? 

• Chinese government  controls rare-earth magnets vital for the U.S. :- As these magnets are essential for cars, EVs, chips and defense tech. Trump fears that America is too dependent on supply. 

• National security and job risks :- If Chinese government cuts exports the U.S industries and defense systems could suffer. Tariffs are Trump’s way to protect both securities and American jobs. 

• 200% tariff as a pressure tactic :- The United States president uses the high tariff threat to push Beijing into keeping rare-earth exports flowing without restrictions.

• Safeguarding U.S. supply chains :- without steady magnet imports the carmakers and EV producers could face major slowdowns. The tariff threat is meant to avoid such disruptions. 

Trump’s Strategy: Pressure, Power & Politics

Trump made the announcement during a meeting with South Korean President Lee Jae Myung in Washington. He claimed that "We have incredible cards, but I don’t want to play them. If I did, it would destroy China.”

He also hinted that he might visit the country “this year or shortly thereafter.” It seems that his goal is to show that he’s tough on country, protect U.S. jobs, and secure supply chains.

On the other hand , he also wants credit for global peace efforts, even bringing up how he “prevented a nuclear war” between North and South Korea that is something he believes could support his Nobel Peace Prize dreams.

Conclusion 

This latest move shows Trump is ready to raise the heat on the country if America’s access to rare-earth magnets is blocked. Whether this 200% tariff threat becomes real or stays a negotiation tool but one thing is clear that  the US China trade war is far from over and rare-earth magnets and  have now become a powerful bargaining chip in the global economic game. US China tariff war has created waves again.