If there’s one thing President Trump has not stopped talking about, it’s tariffs. His long-standing obsession with “making countries pay” has returned in full force in 2025. Now traders on prediction markets like Kalshi are betting on just how far he’ll go.
First it was steel. Then it was China. Now, it’s rare earths. President Donald Trump has unleashed the latest phase of his tariff war, this time targeting a sector many Americans can’t name, but one that’s at the heart of jet engines, semiconductors, and missile systems.
On April 15, Trump signed an Executive Order launching a Section 232 investigation into U.S. reliance on imported critical minerals and derivative products, warning that foreign dominance in these supply chains poses a direct threat to American national security.
The move could result in yet another round of tariffs, this time layered on top of existing penalties against China. The latest string of tariffs, announced in a tweet-turned-press-conference-turned-market panic, has reignited not just geopolitical friction, but market volatility. In response, Kalshi has become a de facto barometer of White House trade chaos.
Why it matters
Rare earths may not trend on TikTok, but they are essential to modern defense, tech, and transportation. And China dominates them, with over 70% of global rare earth refining happening on Chinese soil. Just this week, Beijing suspended exports of six heavy rare earths and rare earth magnets, in what analysts call a calculated chokehold on global supply chains.
Trump’s executive order, according to White House officials, is a direct response.
“We’re not going to let adversaries manipulate our future,” Trump said, while signing the order in front of aerospace industry workers in Michigan.
The Section 232 probe gives the Commerce Secretary authority to determine whether these imports threaten national security. If so, Trump can unilaterally impose tariffs under the Trade Expansion Act of 1962, just like he did with steel and aluminum.
What are traders speculating on?
Prediction market platform Kalshi is now tracking the trade war’s next chapters with multiple active contracts:
What will the U.S. tariff rate on China be on April 30, 2025?
The current rate is up to 245%, including:
- A 125% “reciprocal” tariff
- A 20% fentanyl-linked penalty
- Section 301 tariffs (7.5%–100%)
- Traders are now pricing in the possibility that rare earth tariffs could push this number even higher.
Will Trump impose large tariffs in his first year?
- Market criteria defines “large” as the U.S. average tariff rate exceeding 6%. With broad-based 10% tariffs already in effect (and China at 245%), odds are climbing.
Will the courts block any part of Trump’s tariffs this year?
- Legal pressure is mounting. Several importers and manufacturers are already filing challenges, citing economic damage and lack of due process under past Section 232 rulings.
Which countries will impose tariffs on the U.S. before Q3 2025?
- With China and Canada retaliating, and the EU reportedly considering “strategic countermeasures,” this market is seeing rising interest from hedgers.
When will Trump end his tariffs against China?
- The base case now is “not anytime soon.” Especially after Chinese officials cut off gallium, germanium, and other key metals in response to Trump’s earlier provocations. The current sentiment from the prediction market is less than 30% for it to happen before December this year. Say bye-bye to Shein and Temu. And consider this, stop losing your charging cables; it could get costly.
Rare earths play into tariff prediction markets
Trump’s “Fair and Reciprocal” plan just got a rare-earth twist. With critical minerals now on the table, and supply chains under stress, prediction markets are offering traders a way to hedge, or profit, from every tariff twist.
Forget policy papers. In Trump’s world, tariffs are not about spreadsheets; they’re about psychology. And prediction markets may be the only rational way to make sense of it.
