China has tightened control on exports of rare earths and lithium battery technology where China holds a significant supply chain advantage over the US and the west. Trump has responded threatening 100% tariffs- the markets have plummeted. Everyone knows China has the US over a barrel. Only Libertarians still believe that free markets are real- everyone else knows that nation states have always used military force and strategic control of supply chains and trade routes to gain advantage.

To quote the WSJ-

' A mythology has spread in the MAGA world in recent months that the critics of President Trump’s tariffs were wrong. Few countries retaliated, the economy is great, and the late, great Adam Smith doesn’t know what time it is. Tell that to the investors whipsawed on Friday by the end of the U.S.-China trade truce.

Mr. Trump started the fun by announcing on social media midday Friday that “some very strange things are happening in China!” He said Beijing has turned “very hostile” and is sending letters to the world announcing tighter controls on the export of “every element of production having to do with” rare-earth minerals.

The President is right that China’s move is bad news for the world economy. It marks an escalation in China’s retaliatory response to Mr. Trump’s export controls and tariffs. In his initial Friday post on Truth Social, he said he was contemplating “massive” new tariffs and “many other countermeasures” in response to the Chinese controls.

“For every Element that they have been able to monopolize, we have two,” Mr. Trump wrote. “I never thought it would come to this but perhaps, as with all things, the time has come.” He said this may be “painful” but would be great for the U.S. in the end, whenever that might be. Equity markets began to head south. The S&P 500 fell 2.7% and the Nasdaq 3.56%.

After markets closed, Mr. Trump got specific and said effective Nov. 1 he will impose a new 100% tariff on China on top of an overall effective rate of about 40% he has already imposed on Chinese goods. Stocks were down even more in after-market trading.

Where this stops, nobody knows, which is the problem. The trade war is suddenly hotter than it’s been since Mr. Trump’s infamous Liberation Day announcement in April. Mr. Trump retreated from those border taxes after markets staged a meltdown, and investors have thought the worst was over. Maybe not.

Perhaps Mr. Trump and China will cool trade tempers over the weekend. But Treasury Secretary Scott Bessent has been negotiating with his Chinese counterpart for weeks in anticipation of a summit between Mr. Trump and Chinese President Xi Jinping. The diplomatic sweet-nothings were positive.

None of this is good for the U.S. and global economies. While China and the U.S. have been undergoing a slow-motion economic decoupling, they remain interdependent. China in particular needs exports to provide jobs for its people as its domestic economy has slowed. Let’s hope the two sides step back from the trade-war brink, or Adam Smith might soon be back in fashion.'

The decline of US imperialism and global hegemony looks more and more the trend that even Trumps theatrics cannot reverse.