In a bold and unyielding statement, China has fired back at President Donald Trump’s tariff threats, declaring, 'We do not seek a trade war, but we will not flinch from one.' This defiant response marks the first official reaction from Beijing to Trump’s ultimatum of a 100% tariff hike on Chinese imports by November 1—a move triggered by China’s recent restrictions on rare earth exports, which are critical to everything from smartphones to military hardware. But here’s where it gets controversial: while Trump accuses China of holding the world hostage with its control over rare earths, Beijing argues that the U.S. is escalating tensions with its own barrage of trade restrictions and port fees. Is this a fair accusation, or is China deflecting blame? Let’s dive in.
China’s Commerce Ministry made its stance crystal clear in a statement posted online, emphasizing consistency in its approach. 'Frequently wielding the threat of high tariffs is no way to engage with China,' the ministry stated, framing the issue as one of dialogue versus intimidation. The statement, presented as a Q&A with an unnamed spokesperson, urged the U.S. to resolve disputes through negotiation rather than coercion. Yet, the ministry also warned, 'If the U.S. persists in its confrontational approach, China will take decisive measures to protect its rights and interests.'
And this is the part most people miss: This back-and-forth isn’t just about tariffs—it’s a high-stakes game of economic chess that threatens to derail a potential meeting between Trump and Chinese President Xi Jinping. Such a meeting was seen as a chance to extend a fragile truce in the trade war, which saw tariffs briefly soar above 100% in April. But with both sides accusing the other of violating the spirit of that truce, the path to reconciliation looks increasingly uncertain.
Since taking office, Trump has slapped tariffs on imports from numerous trading partners, aiming to extract concessions. China, however, has stood its ground, leveraging its economic might and dominance in rare earths—it controls nearly 70% of global mining and 90% of processing. This monopoly gives China immense leverage, but it also makes it a target. Trump recently claimed on social media that China is 'becoming very hostile' by restricting access to rare earth metals, which are essential for products ranging from jet engines to laptops. In response, China clarified that export licenses for rare earths will be granted for legitimate civilian uses, though it acknowledged their military applications.
The new regulations add another layer of complexity: foreign companies must now obtain Chinese government approval to export products containing rare earths sourced from China, regardless of where those products are made. This move has already impacted manufacturers worldwide, not just in the U.S. But here’s the kicker: China argues that the U.S. is equally guilty of escalating tensions, pointing to new port fees on Chinese ships set to take effect this week. In retaliation, China announced similar fees on American ships, further fueling the fire.
Is this a tit-for-tat trade war with no end in sight, or is there still room for compromise? As tensions simmer, one thing is clear: the global economy hangs in the balance. The Fortune Global Forum, returning October 26–27, 2025, in Riyadh, will bring together CEOs and world leaders to tackle such pressing issues. Will they find a way forward? Apply for an invitation and be part of the conversation shaping the future of business. (https://conferences.fortune.com/event/global-forum-2025/summary?utmsource=fortunecom&utmmedium=plealink)
