Trade Tensions Between US and China Set to Skyrocket Prices

The trade war between the United States and China has reached a new peak, with potential repercussions on global markets. The United States, under the administration of President Donald Trump, plans to impose an additional 100% tariff on Chinese imports, bringing the overall tariff rate to approximately 130%, effective November 1, 2025.

This decision comes as a response to China's new export controls on rare earth minerals, crucial for U.S. industries such as defense, electric vehicles, and clean energy. The Global Trade Research Initiative (GTRI) anticipates that this move will lead to a rise in prices of key products like electric vehicles, wind turbines, and semiconductor parts. The U.S. intends to 'friend-shore' its mineral supply chains with countries like Australia, Vietnam, and Canada.

The GTRI report warns that the U.S. could face economic fallout, as the country remains dependent on China for essential goods. The escalation might also strain inflation and production costs, potentially affecting U.S. consumers and the broader economic strategy. Meanwhile, India is advised to focus on self-reliance and strategic autonomy to mitigate trade risks while balancing ties with global economic players.

(With inputs from agencies.)