Trump Says No Reason to Meet China’s Xi, Threatens Tariffs in New Rift

 Washington is prepared to revive rare earth production in Australia and Somaliland.

A new rupture has opened between Washington and Beijing after U.S. President Donald Trump abruptly threatened to impose sweeping new tariffs on Chinese imports and canceled his long-anticipated meeting with Chinese President Xi Jinping — an escalation that sent global markets into a tailspin and reignited fears of a new Cold War-style economic standoff.

The confrontation was triggered by Beijing’s dramatic expansion of its rare earth export controls, announced Thursday, which effectively tightened China’s grip over the global supply of critical minerals essential for electric vehicles, semiconductors, and advanced weapons systems.

The move, described by U.S. officials as a form of “economic coercion,” appeared to be Beijing’s latest leverage play in a long-simmering contest for control of the world’s technological future.

Trump, visibly furious, took to Truth Social early Friday to accuse China of “holding the global economy hostage.” He warned that unless Beijing reversed course, his administration would respond with “massive financial countermeasures”, including new tariffs that could mirror the height of the 2018–2019 trade war.

“For every element they monopolize, we have two,” Trump wrote — a thinly veiled signal that Washington is prepared to revive rare earth production through U.S. and allied reserves, particularly in Australia and Somaliland, where American firms have begun exploring partnerships to diversify supply chains.

The fallout was immediate. The S&P 500 plunged 2%, Treasury yields dropped as investors fled to safety, and the dollar weakened against major currencies. The White House, Treasury Department, and U.S. Trade Representative’s office all declined to comment — a silence that suggested the president’s post had caught even his economic team off guard.

Beijing, for its part, has not publicly confirmed whether Xi had ever agreed to the planned meeting at APEC in South Korea. But Chinese state media described Trump’s reaction as “irrational and provocative,” framing his remarks as election-year theater aimed at energizing domestic support.

Behind the bluster lies a deeper strategic struggle. Rare earth elements — 17 minerals crucial to everything from smartphones to missile guidance systems — have become the new frontline in the global power race.

China refines more than 90% of the world’s supply, giving it extraordinary leverage over industries that define 21st-century warfare and innovation. By restricting exports, Beijing is signaling it can still weaponize trade when cornered by U.S. industrial policy, such as Trump’s “America Mining Again” initiative.

For Trump, the fight is both geopolitical and personal. His advisers have long pushed for a decisive break from Chinese mineral dependence, arguing that no U.S. defense modernization or energy transition is secure as long as Beijing dominates critical inputs.

The president’s decision to cancel the Xi meeting, once billed as a reset opportunity, marks a sharp turn toward confrontation — one that could fracture fragile diplomatic gains made earlier this year.

The implications are far-reaching. A renewed tariff war would not only unsettle markets but also redraw the map of global manufacturing, accelerating the decoupling of U.S. and Chinese supply chains.

It could also push China closer to Russia, Iran, and the so-called “resource bloc,” deepening polarization in global trade.

Trump’s message, stripped of diplomacy, is unmistakable: the United States will no longer tolerate dependency on China’s minerals, technology, or goodwill. If Beijing continues to weaponize its rare earth monopoly, Washington is ready to respond in kind — with tariffs, with alliances, and with the full force of its economic statecraft.