BEIJING, China: China signaled on October 12 that it would not back down in the face of President Donald Trump's threat to impose 100 percent tariffs on Chinese imports, urging Washington to settle differences through dialogue rather than intimidation.

"China's stance is consistent," the Commerce Ministry said in its first official response to Trump's remarks. "We do not want a tariff war, but we are not afraid of one."

Trump's threat to sharply raise tariffs by November 1 came after Beijing announced new restrictions on the export of rare earth minerals—critical components in technologies ranging from smartphones to fighter jets. In a post on his Truth Social platform hours later, Trump sought to temper tensions, addressing Chinese leader Xi Jinping directly. "Don't worry about China, it will all be fine!" he wrote, adding that neither leader wanted an economic depression.

The exchange rattled U.S. markets. The S&P 500 fell 2.7 percent on October 10, its worst single-day drop in six months, as investors worried the confrontation could reignite a trade war. The tensions also threaten to derail a potential meeting between Trump and Xi, which had been expected to renew a fragile truce after both sides imposed tariffs exceeding 100 percent earlier this year.

Vice President JD Vance defended Trump's stance, describing China's control over vital supply chains as "a national emergency." Speaking on Fox News, Vance said the administration's goal was to make the U.S. more self-sufficient. "If China responds aggressively, the president has far more cards than they do," he warned. However, he also suggested that Trump was open to compromise if Beijing acted "reasonably."

In its statement, China accused Washington of frequently resorting to "the threat of high tariffs" instead of constructive cooperation. The Commerce Ministry insisted that disputes should be resolved through negotiation and warned that Beijing would "resolutely take corresponding measures" if the U.S. pursued its threats.

Trump also hinted at imposing export controls on unspecified "critical software," further unsettling global markets. Both countries have accused each other of violating previous agreements by tightening trade restrictions. Beijing said the U.S. has recently expanded export controls to more Chinese companies, while Washington accused China of weaponizing its dominance in rare earths.

China, which produces about 70 percent of the world's rare earth minerals and processes 90 percent of them, said it would continue issuing export licenses for legitimate civilian uses but noted their military applications. The new rules require government approval for exports of products containing Chinese-sourced rare earths, regardless of where they are manufactured.

Adding to the standoff, both nations have introduced new port fees on each other's ships, deepening tensions between the world's two largest economies even as both claim to prefer negotiation over escalation.