October 13, 2025

For months, the trade fight between China and the US seemed to cool down with talks of a “thaw” and “truce.” But the peace didn’t last long. This week, the trade battle has fired up again with both giants trading blows that shook the world’s stock markets and created fresh worries. Economist Aleksandar Tomic from Boston College said, "Let's poke the bear again. Let's stir the hornet's nest," perfectly capturing the renewed tension. Tensions Between Giants Trade problems between China and the US are not new and go beyond any single president or party. Yet, with Donald Trump back as president, things have gotten extra spicy. Earlier in the year, tariffs climbed up and down like a roller coaster, provoking angry responses from Chinese leader Xi Jinping. After months of calm, China surprised the world by limiting exports of rare earth minerals—key ingredients for high-tech gadgets. Not to be outdone, Trump hit back, threatening a huge 100% tax on Chinese imports by November 1 and tighter controls on American software exports. Both countries also slapped extra port fees on each other's ships. The market impact was immediate. On Friday, the S&P 500 faced its worst day since April, with investors growing nervous about what might come next. Marc Chandler, a top market strategist, said, "Either this is it, the so-called tariff truce is over and both sides are going to rapidly escalate or these are negotiation talks ahead of the talks between Xi and Trump." Who’s Winning the Trade Tug-of-War? With secret talks probably happening behind the scenes, it’s tough to know who’s ahead. Still, China looks like it might have the upper hand. Trump’s facing problems at home like a government shutdown, while the trade war hits US farmers hard. American soybean sellers, once popular with China, are losing buyers to countries like Brazil and Argentina. Meanwhile, American consumers might soon see pricier gadgets as China controls most rare earth minerals needed for tech. "It becomes an issue of who can replace supply chains faster. And, at least right now, I think China is winning that one," said Tomic. He added humorously, "I don't know what the cycle of a soybean is, but I bet you can grow a soybean faster than you can build a toy factory." Are These Threats Just Talk? Trump says a deal might still happen. He often makes big threats that turn out to be negotiation tactics. There’s a planned meeting with Xi at an Asia-Pacific summit this month, though Trump said on Friday, "I don't know that we're going to have it. I'm going to be there regardless, so I would assume we might have it." Chandler compared the situation to a long, messy divorce: "The wife and the husband are accusing one another of things that, from the outside, look more complicated. This kind of story doesn't have a good guy. We want to have a good guy and a villain. But these are just two large countries both seeking national advantage." So, the world watches as the US and China square off again in this high-stakes trade drama. Will they find peace or turn the heat up even more? Stay tuned!

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Tags: Us-china trade war, Tariffs, Trade tensions, Rare earth minerals, Stock market, Donald trump,