2025-10-11T05:18:43Z

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Just when you thought the US and China might be mending fences, new threats are sending shockwaves through the global economy. On September 19, a phone call between US President Donald Trump and China's President Xi Jinping sparked fleeting hope of improved relations. This was only the second confirmed conversation between the two leaders since Trump's inauguration in January, hinting at a possible thaw.

Previously, tensions reached a boiling point, with US tariffs on Chinese goods soaring to an eye-watering 145% and China's tariffs hitting 125%. Trade had become virtually impossible. But a glimmer of hope appeared in May when tariffs were reduced, and China even eased its restrictions on rare earth exports. For a moment, it felt like the two mighty economies were inching toward a deal.

However, this hope was short-lived. Just this week, China announced a new wave of export controls on rare earths and critical minerals—essential components for everything from smartphones to military weapons. With a staggering control over 90% of global rare earth processing and 70% of supply, China wields unprecedented power in this trade battle.

Meanwhile, Trump has his own strategies in play, seeking access to these minerals from various countries, including Canada and Australia. This tug-of-war has escalated, with China gradually tightening its grip on rare earth exports for the past two years.

In a swift counter, Trump threatened to impose a whopping 100% tariff on Chinese imports starting November 1, or potentially sooner. He even hinted at canceling a proposed meeting with Xi at the upcoming Asia-Pacific Economic Cooperation (APEC) summit in South Korea. This sudden shift places the US-China relationship back in a precarious position, reminiscent of earlier trade war days.

As markets reel, one thing is clear: the trade war is reignited, proving that the relationship between these two economic giants remains anything but stable. With each leader poised to make bold moves, the world watches in suspense—what's next for these titans of trade?