| After some months of relative calm, President Donald Trump rattled markets today with a new broadside against China. Trump’s threat to impose new, “massive” tariffs on Chinese goods and to scuttle a planned meeting later this month with China’s President Xi Jinping was the latest escalation of a battle that’s been simmering despite a negotiated truce in their trade war. The proximate cause of Trump’s announcement on his Truth Social platform was China’s imposition of new export restrictions on rare earth minerals, which are vital to a wide swath of technologies that define modern life. China dominates both mining and processing of rare earths, and it’s leveraging that to try to control exports to other countries that contain even traces of the materials originating from Chinese producers. The US has acted to constrain China as well, primarily by restricting Beijing’s access to advanced semiconductors needed for developing artificial intelligence, an area of American dominance. Last week the Trump administration took steps to prevent companies like Chinese chipmaker Huawei from using subsidiaries to get around restrictions on American technology. Trump today called China’s export restrictions “surprising” and that it would force him to “financially counter their move.” He also said there was now “no reason” to meet with Xi at the Asia-Pacific Economic Cooperation forum at the end of the month in South Korea. In financial markets, stocks, oil and crypto all got hammered. Also taking a hit were US farmers. Soybean futures plunged. Trump’s post marked an abrupt shift. The US president had a call with Xi on Sept. 19 that he called “very productive.” Even as of yesterday Trump expressed optimism that he could convince Xi to end China’s moratorium on US soybean buys and said the two leaders had much to discuss. The president’s change in tone, though, may be a bargaining tactic rather than a break in the trade detente. He stopped short of saying he wouldn’t meet with Xi at APEC and that his potential retaliation was “Dependent on what China says about the hostile ‘order’ that they have just put out.” As was seen in the tariff frenzy of Trump’s early days in office, there still may be room for negotiation. — Joe Sobczyk Read More: | 
