President Donald Trump on Friday voiced frustration with what he called China’s “trade hostility,” threatening to respond with large tariffs on China and to cancel his upcoming meeting with Chinese President Xi Jinping.
The comments triggered a stock selloff. The Dow Jones Industrial Average tumbled 385 points, or 0.8%. While the S&P 500 fell 1.25% and the tech-heavy Nasdaq dropped 1.75%.
Trump’s remarks came a day after China imposed new restrictions on rare-earth minerals, key materials in the production of semiconductors used for everything from artificial intelligence to home appliances.
In a social media post, Trump said China had sent letters to countries around the world threatening to impose export controls on “each and every element of production having to do with Rare Earths.”
“There is no way that China should be allowed to hold the World ‘captive,’” but that seems to have been their plan for quite some time,” Trump said.
In retaliation, Trump threatened a “massive increase” on tariffs on Chinese products coming into the US, even though he said the move would be “potentially painful.”
Tariffs on Chinese imports into the US currently stand at 30%, down from the high point of 145% earlier this year.
Trump also threatened to cancel an upcoming meeting with Jinping.
“This was a real surprise, not only to me, but to all the Leaders of the Free World. I was to meet President Xi in two weeks, at APEC, in South Korea, but now there seems to be no reason to do so,” Trump concludes.
This comes as the trade truce between the US and China is still in effect but set to expire in less than a month.
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