Trump says ‘there seems to be no reason’ to meet China’s Xi during Asia trip

US President Donald Trump said on Friday on his social media site that “there seems to be no reason” to meet Chinese leader Xi Jinping as part of an upcoming trip to South Korea after China restricted exports of rare earths needed for American industry.

Mr Trump suggested that he was looking at a “massive increase” of import taxes on Chinese products in response to Mr Xi’s moves.

“One of the Policies that we are calculating at this moment is a massive increase of Tariffs on Chinese products coming into the United States of America,” Mr Trump posted on Truth Social.

“There are many other countermeasures that are, likewise, under serious consideration.”

The United States and China have been jockeying for advantage in trade talks, after the import taxes announced earlier this year triggered a trade war between the world’s two largest economies.

Both nations agreed to ratchet down tariffs after negotiations in Switzerland and the UK, yet tensions remain as China has sought to restrict America’s access to the difficult-to-mine rare earth’s needed for a wide array of US technologies.

Mr Trump said China is “becoming very hostile” and that it is holding the world “captive” by restricting access to the metals and magnets used in electronics, computer chips, lasers and other technologies.

“I have not spoken to President Xi because there was no reason to do so,” Mr Trump posted. “This was a real surprise, not only to me, but to all the Leaders of the Free World.”

Mr Trump did not formally cancel the meeting with Mr Xi, so much as indicate that it might not happen as part of a trip at the end of the month in Asia.

The trip was scheduled to include a stop in Malaysia, which is hosting the Association of Southeast Asian Nations summit; a stop in Japan; and a visit to South Korea, where he was slated to meet Mr Xi ahead of the Asia-Pacific Economic Co-operation summit.

“I was to meet President Xi in two weeks, at APEC, in South Korea, but now there seems to be no reason to do so,” Mr Trump posted.

The Chinese Embassy in Washington did not immediately respond to an Associated Press request for comment.

Mr Trump’s threat shattered a months-long calm on Wall Street, and the S&P 500 fell as much as 2% on worries about rising tensions between the world’s two largest economies.

The outbreak of a tariff-fuelled trade war between the US and China initially caused the world economy to shudder over the possibility of global commerce collapsing.

Mr Trump imposed tariffs totalling 145% on Chinese goods, with China responding with import taxes of 125% on American products.

The taxes were so high as to effectively be a blockade on trade between the countries. That led to negotiations that reduced the tariff charged by the US government to 30% and the rate imposed by China to 10% so that further talks could take place.

But differences continue over America’s access to rare earths from China, US restrictions on China’s ability to import advanced computer chips, sales of American-grown soybeans and a series of tit-for-tat port fees being levied by both countries starting on Tuesday.

There is already a backlog of export licence applications from Beijing’s previous round of export controls on rare earth elements, and the latest announcements “add further complexity to the global supply chain of rare earth elements,” the European Union Chamber of Commerce in China said in a statement.

Just what Mr Trump’s threat meant was open to interpretation, as it could simply be an attempt to gain some leverage under the belief that China has overplayed its hand or an ominous sign of trade tensions leading to potentially destructive increase in tariff rates.

Cole McFaul, a research fellow at Georgetown University’s Centre for Security and Emerging Technology, said Mr Trump appeared in his post to be readying for talks on the possibility that China had overplayed its hand. By contrast, China sees itself as having come out ahead when the two countries have engaged in talks.

“From Beijing’s point of view, they’re in a moment where they’re feeling a lot of confidence about their ability to handle the Trump administration,” Mr McFaul said.

“Their impression is they’ve come to the negotiating table and extracted key concessions.”

Craig Singleton, senior director of the China programme at the Foundation for Defence of Democracies, a think tank, said Mr Trump’s post could “mark the beginning of the end of the tariff truce” that had lowered the tax rates charged by both countries.

It is still unclear how Trump intends to follow through on his threats and how China plans to respond.

“But the risk is clear: Mutually assured disruption between the two sides is no longer a metaphor,” Mr Singleton said. “Both sides are reaching for their economic weapons at the same time, and neither seems willing to back down.”