In a dramatic escalation of trade tensions, United States President Donald Trump has announced a fresh 100% tariff on Chinese imports, effective from 1 November 2025. This is in addition to existing duties, taking the total tariff burden on Chinese goods to 130%. The move comes just a day after President Trump failed to secure the Nobel Peace Prize, fuelling speculation over whether political frustration has played a role in this latest economic offensive. While Trump has not directly linked his Nobel loss to the China tariffs, the timing has raised eyebrows globally. In today’s episode of DNA, Rahul Sinha, Managing Editor of Zee News, conducted a detailed analysis, examining the strategic and political dimensions of Trump’s decision and its potential global impact.
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In his official statement, Trump also cancelled a scheduled meeting with Chinese President Xi Jinping, a summit he had previously described as “highly anticipated”. Alongside the tariff announcement, the US will also halt exports of critical software to China.
At the heart of the dispute is China’s recent decision to impose strict export controls on rare earth minerals, essential components in industries such as electronics, defence, electric vehicles, and renewable energy. China currently supplies around 70% of the world’s rare earth materials.
Trump accused China of using rare earths as a geopolitical weapon. In a strongly worded message posted online, he stated, “China’s sweeping decision to implement export controls will affect all countries without exception. It is a hostile act, and it is now evident that this plan has been in the works for years.”
Global Markets React Sharply
The announcement triggered immediate panic in global financial markets. The NASDAQ closed down by over 3.5% at 22,204, while the Dow Jones fell nearly 2%, ending at 45,480. The S&P 500 dropped approximately 3%, finishing at 6,553. The tech sector bore the brunt, with Apple and Nvidia shares falling by up to 5%.
In total, the US stock market lost an estimated $1.5 trillion in a single day. Meanwhile, the global cryptocurrency market saw $19 billion in liquidations, the largest single-day decline recorded to date.
Concerns are now mounting that this tariff war could severely disrupt global supply chains. Analysts warn that prices of goods like smartphones, laptops and EV batteries could rise by 20 to 40% once the tariffs take effect.
Mixed Impact On India
For India, the fallout presents a mixed picture. With companies looking to diversify away from China, India could emerge as a key alternative in global supply chains. The country already exports 18% of its goods to the US, and that figure could rise by 10 to 15% as American buyers seek non-Chinese suppliers.
However, the situation also poses risks. A global slowdown triggered by the tariff war could impact Indian exports. Additionally, costlier Chinese imports may raise production costs for Indian manufacturers.
India is also a significant importer of rare-earth-based components, particularly for the defence and electronics sectors. With China controlling the supply, there’s concern that Beijing could pressure New Delhi to restrict the re-export of these materials to the US, potentially affecting India’s outbound trade.
A Global Flashpoint
The tariff escalation between the world’s two largest economies comes at a time when the international community is already grappling with inflationary pressures, the Ukraine conflict, and instability in the Middle East. Experts fear that this development could further strain global trade, disrupt industrial production, and increase costs for consumers.
If fully implemented, the tariffs could cause far-reaching economic consequences across sectors, from semiconductors to consumer electronics and renewable energy. With supply chains tightly interlinked and dependent on Chinese inputs, especially rare earths, the road ahead may prove bumpy for industries and governments alike.
As markets await Monday’s opening bell, all eyes remain on Washington and Beijing, and on whether this trade war is just beginning.
