US President Donald Trump has reignited the trade war with China, threatening to impose an additional 100 percent tariff on Chinese goods.

Trump accused Beijing of "becoming very hostile" and trying to hold the world "captive" after China announced that it would further curb exports of rare earth metals.

China first began restricting rare earth supplies to the US in April in response to tariffs, as well as to the EU, over tariffs on electric cars. Last week, the country announced that it would tighten export controls on December 1 and block the export of some key battery materials from November 8. Devices like electric motors and computer chips that contain rare earth metals now also face blocks.

China’s Ministry of Commerce said that the moves were made to stop rare earth metals from being used in technologies with military applications.

The country refines all of the world’s samarium, which is used in F-35 fighter jets, missiles, and other weapons.

China also refines 99 percent of the world’s dysprosium, and all of the world's ultrapure dysprosium. This is used by the semiconductor industry to preserve magnetic stability even as the chips grow hotter.

Following the new restrictions, Trump threatened to pull out of a meeting with China's President Xi Jinping later this month.

The US President said that he would impose additional tariffs of 100 percent on China's US-bound exports, along with new export controls on critical software, by November 1. Tariffs are paid by the importer, not the exporter.

Shares in major tech companies and the value of most cryptocurrencies fell heavily on the news.

On Sunday, however, Trump appeared willing to walk back the threat: "Don't worry about China, it will all be fine!"

"Highly respected President Xi just had a bad moment. He doesn't want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!"

China's commerce ministry said that it would retaliate with its own tariffs if they go ahead. "Threatening to impose high tariffs at the drop of a hat is not the right way to deal with China. China's position on tariff wars has always been consistent: we don't want to fight, but we are not afraid to fight."