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But on Truth Social on Sunday night, Trump posted: “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!!!”

Earlier on Sunday, Vice President J.D. Vance, in an appearance on Fox News, urged Beijing to “choose the path of reason.” Vance warned, “the President of the United States has far more cards than the People’s Republic of China.”

The flare-up comes ahead of an expected meeting between Trump and Xi in South Korea later this month and as the two countries remain in talks to reach a trade deal before their truce, which brought down escalating tit-for-tat tariffs from both sides, expires in November. 

“The recent policy moves suggest a wider range of potential outcomes than appeared to be the case ahead of the last few key U.S.-China meetings,” Goldman Sachs Group Inc. economists including Jan Hatzius and Andrew Tilton, wrote in a note, according to Bloomberg. “The most likely scenario seems to be that both sides pull back on the most aggressive policies and that talks lead to a further—and possibly indefinite—extension of the tariff escalation pause reached in May.”

China and U.S. renew tit-for-tat trade moves

China’s Ministry of Commerce announced Thursday sweeping new export controls on rare earth products.

Under the new rules, overseas exporters must apply for an export license in order to export products that contain even small amounts of Chinese rare earths, as well as some technology used for processing rare earths and making magnets. These curbs come into effect on Dec. 1.

By default, license applications to export rare earth products to overseas buyers for military purposes, as well as to end-users on export control lists, will not be approved. The ministry said the move is intended “to safeguard national security and interests.” Additionally, exports of rare earth items for research and development related to certain computer chips, as well as for artificial intelligence research with potential military applications, will be approved “on a case-by-case basis.” These curbs came into effect immediately on Thursday.

he ministry also announced on Thursday curbs on more rare earths and related products, including holmium, europium, ytterbium, thulium, and erbium, effective Nov. 8.

In response, Trump on Friday announced a 100% tariff on Chinese goods, on top of existing levies on Chinese products. The President also announced restrictions on critical software exports, with both changes coming into effect on Nov. 1. Trump also initially threatened to cancel a meeting with Xi, before clarifying that he is “going to be there regardless” but that he was not sure “that we’re going to have it.”

When asked about the tensions by reporters on Sunday as he was heading to the Middle East, Trump appeared to soften his stance, leaving room for negotiations with China.

“You know, for me, you know what Nov. 1 is? It’s an eternity. Nov. 1 is an eternity for me,” Trump said.

The U.S. and China’s trade truce, which lowered tariffs from a prohibitive 145% on Chinese goods to 30% (although it is effectively higher on most goods due to stacking tariffs) and from 125% on U.S. goods to 10%, is set to expire on Nov. 10.

U.S. Trade Representative Jamieson Greer told Fox News on Sunday that China’s rare earth export curbs were a “power grab” that “won’t be tolerated,” but he added, “these measures aren’t in place yet, the tariffs aren’t in place yet. It’s scheduled for Nov. 1. So I think we’ll see the markets calm this coming week, as they see things settle out, hopefully.”

China’s Ministry of Commerce said on Sunday that its export controls on rare earth items is in defense of the country’s “national security and international common security” and to limit the use of Chinese rare earths in military conflicts. China notified countries before announcing the measures, the ministry said, emphasizing that export controls are not export bans. (Greer told Fox News that the U.S. was not notified and learned of the export controls via public sources.)

The ministry accused the U.S. of operating within a “double standard,” noting that the U.S. has more than 3,000 items on its Commerce Control List, whereas China’s Export Control List of Dual-use Items covers around 900 items. The ministry also said that the U.S. has introduced new restrictions targeting China even after the two countries have met several times for trade talks. In September, the U.S. Commerce Department expanded its export controls to close loopholes and keep Beijing from buying the most advanced semiconductor chips. The U.S. also blacklisted several Chinese entities and introduced new fees beginning Oct. 14 on large Chinese ships through Section 301 measures that target China’s maritime, logistics, and shipbuilding industries.

“For a long time, the U.S. has been overstretching the concept of national security, abusing export control, taking discriminatory actions against China, and imposing unilateral long-arm jurisdiction measures on various products, including semiconductor equipment and chips,” the ministry said. “The U.S. actions have severely harmed China’s interests and undermined the atmosphere of bilateral economic and trade talks, and China is resolutely opposed to them.”

China has imposed new fees on American vessels at Chinese ports at the same time that the U.S. is imposing its new port fees. China also launched an antitrust investigation into U.S. tech giant Qualcomm over its acquisition of Israeli semiconductor company Autotalks without informing China’s State Administration for Market Regulation.

“Willful threats of high tariffs are not the right way to get along with China,” the Commerce Ministry said. “China’s position on the trade war is consistent: we do not want it, but we are not afraid of it.”

Outlook for trade deal clouds

The refreshed trade tensions mark a “turning point” in U.S.-China relations, Hu Xijin, former editor-in-chief of the Chinese state-run Global Times, said in a post on X.

“This year, the Trump Administration imposed tariffs on Chinese products several times without even consulting us. Sanctioning our companies was done just as casually,” he wrote. “The U.S. isn’t entirely out of cards to play; it still has some. But when it comes to a trump card like rare earths, that’s something the U.S. can’t pull out of its sleeve anytime soon.”

“What matters now is that the U.S. knows China has that capability,” he added.

China has sought to strengthen its position at the negotiating table not only by withholding its exports but also by demonstrating its leverage as an importer of U.S. agricultural products. China has effectively frozen new orders of U.S. soybeans, leading U.S. exports to China, which was once its biggest buyer, to tumble by more than 50% in value this year and crippling farms across the U.S. Also, in March, China did not renew approvals for hundreds of U.S. meat exports, effectively banning imports of American beef.

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U.S. President Donald Trump chats with Chinese President Xi Jinping during a welcome ceremony at the Great Hall of the People in Beijing in 2017.   Andy Wong—AP

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