TL;DR: President Trump confirmed on October 15, 2025, that the U.S. is officially in a trade war with China. This comes after China restricted exports of rare earth minerals and the U.S. responded with 100% tariffs on Chinese imports, effective November 1. Treasury Secretary Bessent proposed a possible truce if China reverses its export controls, but tensions remain high as both countries threaten further measures.
What Happened
- October 15, 2025: President Trump declared, “We’re in one now,” when asked if a sustained trade war with China was underway.
- Trump confirmed 100% tariffs on Chinese goods would take effect November 1, calling them essential for national security.
- The move follows China’s October 10 decision to restrict exports of rare earth minerals, which are key for tech and defense.
- Trump said, “If we didn’t have tariffs, we would be exposed as being a nothing.”
- He also warned of possibly cutting trade in cooking oil, a key biofuel input, and canceling a planned meeting with President Xi.
U.S. Officials' Responses
- Treasury Secretary Scott Bessent proposed extending a tariff truce if China lifts its rare earth controls: “Is it possible that we could go to a longer roll in return? Perhaps.”
- Bessent predicted a coordinated response with EU, Australia, Canada, India, and Asian democracies.
- He rejected market concerns, saying the U.S. won’t negotiate “because the stock market is going down.”
- Bessent criticized Chinese Vice Commerce Minister Li Chenggang as “unhinged” and “very disrespectful” during an August visit to Washington.
China's Response
- China vowed to “fight to the end,” accusing the U.S. of economic bullying.
- China’s Commerce Ministry said rare earth export curbs respond to U.S. hostility in tech, including AI chip restrictions.
- China may impose reciprocal tariffs on U.S. agriculture and energy imports like soybeans and LNG.
Economic and Market Impact
- U.S. imports from China dropped 19% in early 2025; new tariffs could cost households $50-100 more annually.
- New tariffs may add $200-300 billion in levies, with biggest impacts on electronics and auto sectors.
- Rare earth prices surged 15%, benefiting producers like MP Materials, but raising costs for tech companies like Apple and Tesla.
- Stock markets dipped after the initial announcement but later stabilized.
Timeline of Events
Date | Event |
May 2025 | U.S.-China 90-day tariff truce established |
Oct 10 | China expands rare earth export controls |
Oct 10 | Trump announces 100% tariffs starting Nov 1 |
Oct 15 | Trump officially declares trade war |
Late Oct | Potential Trump-Xi summit at APEC in South Korea |