Supply Chain Report – 10/13/2025
China has warned it will take “resolute measures” if the United States proceeds with its plan to impose 100% tariffs on Chinese imports, a move that has reignited global market concerns and heightened uncertainty over trade relations between the world’s two largest economies.
The statement from China’s Ministry of Commerce followed an announcement by former U.S. President Donald Trump on Friday, outlining plans to impose new duties on Chinese exports and to implement additional controls on critical software starting November 1. The ministry described the move as counterproductive and urged Washington to avoid “wilful threats” that could escalate tensions.
“High tariff threats are not the right way to get along with China,” a spokesperson for the ministry said through state media agency Xinhua. “China’s position remains consistent—we do not seek a trade conflict, but we are not afraid of one. If the United States insists on going the wrong way, China will act to protect its legitimate rights and interests.”
The renewed tariff threat came after Beijing introduced updated export controls on rare earth elements, including holmium, erbium, thulium, europium, and ytterbium—materials critical to global manufacturing industries such as renewable energy, semiconductors, and consumer electronics. The U.S. administration has described the export tightening as “restrictive,” though Chinese officials maintain that the controls are legitimate and in line with international trade norms.
“China’s export controls are not export bans,” the ministry added. “All compliant export applications for civilian use can be approved, and businesses need not worry.”
The measures were announced shortly after Washington added several Chinese companies to its export control list, citing concerns over technology transfers involving chipmaking equipment and advanced goods.
Financial markets reacted sharply to the developments. On Friday, the Dow Jones Industrial Average fell 879 points, or 1.9%, amid renewed investor fears of trade disruption. Futures markets showed an additional 887-point decline ahead of Monday’s trading session. Meanwhile, approximately $2 trillion was wiped off U.S. stock valuations, reflecting widespread uncertainty over the direction of trade policy.
Global markets also showed signs of volatility. The UK’s FTSE 100 index dropped nearly 1% on Friday as investors weighed the potential impact of renewed tariff tensions on global supply chains. Bitcoin, which initially plunged 8% following Trump’s remarks, recovered 4% on Sunday after China refrained from immediate retaliatory action.
In a post on Truth Social, Trump sought to calm concerns, stating, “Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!”
Political analysts, however, note that the situation remains fluid. U.S. Senator JD Vance commented that the outcome would depend heavily on how both governments choose to respond. “If China responds aggressively, the U.S. has strong options,” he said in an interview. “If both sides act reasonably, progress can still be made.”
Market strategists are now assessing whether the tariff announcement is a concrete policy move or part of a broader negotiation strategy. Michael Brown, senior research strategist at brokerage firm Pepperstone, noted that such tactics have been used previously to extract trade concessions. “The question is whether this is a credible long-term measure or another ‘escalate to de-escalate’ approach designed to accelerate negotiations,” Brown said.
Economists warn that escalating tariff threats could slow global trade recovery and disrupt industrial supply chains already under pressure from high logistics costs and material shortages. For now, market participants and policy observers await further clarification from both Washington and Beijing on potential next steps.
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