US President Donald Trump has announced plans to impose an additional 100 percent tariff on goods imported from China starting next month. He also said that the US would introduce new export controls on critical software, further escalating trade tensions between the two countries.

The move came after China tightened its export rules on rare earth materials, which are essential for making smartphones, cars, and other electronic devices. Trump accused China of being “very hostile” and trying to hold the world “captive” by controlling the supply of these materials. He also threatened to cancel a planned meeting with Chinese President Xi Jinping, though later clarified that he was still undecided.

Following his remarks, US financial markets fell sharply, with the S&P 500 index dropping 2.7 percent, its biggest fall since April. Analysts said the new tariffs could hurt both US businesses and consumers, especially industries that rely heavily on Chinese raw materials.

China, in response, launched a monopoly investigation against US tech company Qualcomm and introduced new port fees for ships linked to American firms. These steps have added more uncertainty to the already fragile trade relationship.

Experts say both countries have been trying to ease tensions since May, when they agreed to reduce earlier tariffs. However, disputes over technology, rare earths, and semiconductor trade remain unresolved.

Trade analysts believe China’s latest actions are meant to strengthen its position before the next round of talks. Some experts also said that China seems more confident, believing it can handle economic pressure better than the US.

While a meeting between Trump and Xi now seems unlikely, many expect fresh negotiations to happen soon, as both countries still depend heavily on each other for trade and technology.