Trump threatens to jack up tariffs on China over rare-earth controls

President Trump on Friday threatened to raise U.S. tariffs on China over its new restrictions on rare-earth elements.

"They are becoming very hostile, and sending letters to Countries throughout the World, that they want to impose Export Controls on each and every element of production having to do with Rare Earths, and virtually anything else they can think of, even if it's not manufactured in China," Mr. Trump wrote in a social media post on Truth Social.

Mr. Trump's threat follows a move by China this week to implement tighter restrictions on the country's exports of rare earths, critical minerals used to manufacture products including semiconductors, electric car batteries, jet engines and defense weapons.

China produces as much as 95% of the world's rare earth magnets, according to energy research company Wood Mackenzie. Access to such materials has been a key sticking point in trade talks between Washington and Beijing.

The new export controls outlined by the country's Ministry of Commerce, which took effect on Thursday, requires companies to get special approval to export products containing even trace amounts of rare earths sourced from China, including if those products were manufactured abroad by non-Chinese companies.

An English translation of the new rules released Thursday does not specify potential penalties if exporters fail to comply with the controls.

Mr. Trump expressed surprise at the the new trade measures, describing the move by China's government as "very hostile" and vowing to retaliate if Beijing follows through in applying the rare-earth controls.

"One of the Policies that we are calculating at this moment is a massive increase of Tariffs on Chinese products coming into the United States of America," Mr. Trump said in his post. "There are many other countermeasures that are, likewise, under serious consideration."

Mr. Trump also threatened to call off a planned meeting with Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation summit in South Korea later this month.

In June, the U.S. and China announced they had agreed on a framework deal aimed at defusing tensions over tariffs, rare earths and other issues.

Stocks fell Friday amid concerns of a renewed trade conflict between the U.S. and China, with the S&P 500 slipping 131 points, or nearly 2%, to 6,664. The blue-chip Dow Jones Industrial Average fell 624 points, or 1.3%, and the tech-heavy Nasdaq Composite dropped nearly 600 points, or 2.6%.