Tariff Shock: Trump’s 100% Move and Why Rare Earths Suddenly Matter

What just happened

President Trump threatened a sweeping 100% tariff on imports from China, scheduled for November 1st (or possibly sooner), after Beijing restricted exports of rare earths. Markets reacted badly and global investors got nervous, because this isn’t a small tweak. It's a heavy escalation on top of existing trade measures like the roughly 30% tariffs already in place. The announcement seems like a bargaining chip, but it could instead kick off a broader clash that rattles global commerce.

Why rare earths are the leverage point

China controls an outsized share of the rare earth supply chain. Roughly 68% of mining and about 85% of permanent magnet production. Which gives Beijing real bargaining power. Those minerals are the backbone of magnets used in electric vehicles, wind turbines and many consumer gadgets. When a crucial input is controlled by one side, that side can push prices, slow shipments, or influence technology development. It's totally and completely obvious this changes the balance, and manufacturers who depend on those materials could be stuck scrambling.

The immediate fallout

Stock markets dropped and investors re-priced risk, while manufacturers and tech firms started to reassess their supply chains. The risks to global supply chains are large. Sectors tied to AI hardware, EVs, and defense gear are especially exposed. The White House says the move is a response to export curbs and other Chinese actions, and Beijing appears ready to use its rare earth dominance as a counterweight. The diplomatic calendar got messy too; a planned summit with Xi Jinping might still happen, but timing and tone are now uncertain, and meetings could be less productive than expected.

What could come next

We might see a few possible paths: negotiations that de-escalate the tension, a prolonged tariff war that disrupts trade flows, or targeted moves like expanded export controls. Each has different consequences for prices and growth. Firms could accelerate efforts to diversify sourcing or invest in recycling and domestic production, but such shifts take time and cost money. Smaller countries in supply chains could be squeezed, and some industries might see production delays and higher costs— the shocks could cascade through electronics, autos and defense.

And yes, companies and policymakers will hustle to patch holes (there are alternatives and workarounds that could emerge, like new mines, recycling tech, or substitute materials) but this all takes months if not years, and in the meantime inventories and prices will swing.

This standoff could slow global growth and might push supply-chain reshoring sooner than many expected.