“We just learned that China has taken an extremely aggressive stance on trade, sending an extremely hostile letter to the world announcing that, effective November 1, 2025, it will implement wide-scale export controls on virtually every product it makes — and even some it doesn't,” Trump wrote on social media.
The maneuver will reignite fears of global trade disruptions that could lead to a virtual severing of ties between the world's two largest economies, and dramatically raises the stakes for Trump and Xi in ongoing, hugely important trade negotiations.
Trump admitted on Friday that he could back off on planned tariff escalation if China drops its threat to impose restrictions on rare earth exports, while adding that a meeting with Xi later this month is still possible.
“That's why I set the deadline for November 1,” Trump said. “We'll see what happens,” he added.
Markets are reacting
Trump's announced tariffs would raise import taxes on many Chinese goods to 130%. from next month. That would be just below the 145% level that was in effect earlier this year, before both countries cut rates as part of a ceasefire aimed at progressing trade talks.
Markets reacted sharply after Trump suggested the move earlier Friday in a social media post. US stocks suffered their worst sell-off in six months. The S&P 500 lost all of its weekly gain, falling 2.7%. — this is the worst day since April 10. The Nasdaq 100 index fell 3.5%. Soybean prices in Chicago fell by as much as 1.9%.
