By John Q. Hosedrinker 
In a move to counter China’s new export controls on rare earth minerals, President Trump announced on Friday that the U.S. would impose 100% tariffs on Chinese imports, effective November 1st, in addition to existing tariffs. The President also stated that the U.S. would implement export controls on “any and all critical software” starting on the same date. These actions follow China’s decision to control exports of rare earth minerals, crucial for high-tech industries, which make up around 70% of the global supply. Trump had threatened to cancel an upcoming meeting with Chinese President Xi Jinping in response to China’s actions.
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Trump puts extra 100% tariff on China imports, adds export controls on ‘critical software’. Okay, so here we are again, wading into the choppy waters of international trade with a familiar face at the helm, or rather, making waves from the top. The core of the matter is this: a proposed extra 100% tariff on imports from China, coupled with new export controls specifically targeting “critical software.” This definitely feels like a significant escalation in the ongoing trade tussle, and naturally, the immediate reaction is a mix of concern, skepticism, and a healthy dose of “here we go again.”
The most pressing question that leaps to mind is whether this is really how tariffs are supposed to work. And, even more relevant, does the person proposing this really understand how tariffs actually function? The concept of slapping an extra 100% on top of existing import duties is a bold move, no doubt. But the complexities of global trade are vast, and the implications of such a drastic measure are far-reaching. I can’t help but wonder, will this even make it past the initial announcement phase? Perhaps, like so many pronouncements of the past, it’ll fade away as quickly as it appeared, maybe before it even gets implemented. It wouldn’t be the first time.
Then there’s the element of timing and motivation. Could this be a reaction to something, like perhaps disappointment over not receiving a particular accolade? We’ve seen this pattern before, haven’t we? A perceived slight, followed by a swift, often unpredictable, policy shift. I am aware that a considerable amount of the world’s essential products, including medical machinery and even medicines, are produced in Asia. This could affect us greatly.
The implications of these tariffs extend far beyond the immediate impact on consumers. They potentially damage U.S. businesses that rely on goods imported from China, in addition to the impact on international relations, especially when the US needs China more than China needs the US. There’s a sense that these actions are harming our own economy, not just theirs. It’s as if this is a self-inflicted wound. Many have argued that the ultimate cost of these tariffs will be borne by U.S. businesses and consumers, a consequence that tends to be overlooked in the heat of these trade battles. Farmers know this all too well.
Adding to the complexity, we have the export controls on “critical software”. What exactly constitutes “critical software” is the million-dollar question. In a world increasingly reliant on technology, software powers everything from our phones to the complex algorithms that drive AI. The specifics here could have massive consequences, impacting industries across the board. Who decides what’s “critical”? How will this be enforced? And what about the open-source software that’s freely available? Can you really control that? The potential for unintended consequences is huge.
One thing is clear: China is a major player in global trade. They produce the vast majority of rare-earth materials. Their response, or lack thereof, will be key. China’s ability to obtain goods and knowledge, despite export controls, is well documented. There’s also a lingering worry about the impact on American businesses, many of whom depend on Chinese imports. There’s a real risk of losing out on one of the world’s biggest markets.
This whole thing feels chaotic. The idea of a “Trump gem of a deal” from a few months ago, which included agreements around GPU and rare-earth mineral exports and imports, seems like a distant memory. The ever-shifting landscape of trade policy can leave businesses reeling. It’s a volatile environment where any semblance of long-term planning becomes incredibly difficult.
The legal implications are also important. Some would argue the tariffs are illegal. It highlights the need for consistent, predictable trade policies.