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Trump's 100% tariff threat against China sparks global market turmoil; Beijing vows retaliation

By bellecarter // 2025-10-15

• President Trump threatens 100 percent tariffs on all Chinese imports by Nov. 1, up from the current 30 percent, following China's restrictions on rare earth exports. China vows "resolute measures" in retaliation, raising fears of a full-blown "Trade War 2.0."
• Dow Jones plunges 879 points, wiping out $2 trillion in market value; futures suggest further losses. Bitcoin briefly crashes 8% before stabilizing as investors brace for volatility.
• China controls 80 percent of global rare earth production, restricting exports of holmium, erbium, thulium, europium and ytterbium—critical for military tech, EVs and electronics. U.S. accuses China of economic coercion, while Beijing claims export controls are not a ban.
• The escalation threatens global supply chains, tech decoupling and military modernization (F-35 jets, EVs, wind turbines depend on rare earths). It also risks fracturing alliances with EU, Japan and South Korea, while benefiting Russia and North Korea.

President Donald Trump's abrupt threat to impose a 100 percent tariff on all Chinese imports by Nov. 1 has sent shockwaves through global financial markets, reigniting fears of a full-blown trade war as Beijing vowed "resolute measures" in retaliation. The escalation, announced Friday, Oct. 10, via Trump's Truth Social account, follows China's recent restrictions on rare earth exports—critical minerals used in everything from smartphones to military hardware—prompting the U.S. to accuse Beijing of "holding the world captive" through economic coercion. The Dow Jones Industrial Average plummeted 879 points (1.9 percent) on Friday, erasing nearly $2 trillion in market value, while Dow futures suggested another 887-point drop ahead of Monday's opening bell. Bitcoin, initially crashing eight percent, rebounded slightly after China's Commerce Ministry stopped short of immediate countermeasures, though it warned that Trump's "willful threats" were "not the right way to get along with China." With both nations digging in, the stakes now extend beyond economics—threatening geopolitical stability, supply chains and a potential derailment of high-level diplomacy, including a planned Trump-Xi Jinping meeting at October's APEC summit in South Korea. The latest confrontation stems from China's August 2025 export controls on five rare earth elements—holmium, erbium, thulium, europium and ytterbium—which are essential for advanced manufacturing. Beijing framed the restrictions as a legitimate regulatory measure, insisting they were not an outright ban. "China's export controls are not export bans," a spokesperson from China's Ministry of Commerce told state media Xinhua, adding that "all applications of compliant export for civil use can get approval." Trump, however, interpreted the move as economic warfare. "China has become very hostile," he declared Friday, accusing Beijing of weaponizing its near-monopoly on rare earths—a sector it dominates with 80 percent of global production. His proposed 100 percent tariff would more than triple the current 30 percent rate agreed upon in a 90-day truce last August, when both sides temporarily de-escalated tensions. That agreement, set to expire in November, now hangs in the balance. China's response was swift. "If the U.S. insists on going the wrong way, China will surely take resolute measures," the Commerce Ministry warned, though it did not specify what form retaliation might take. Analysts speculate Beijing could target U.S. agricultural exports, tech firms or even dollar-denominated assets, given its $1.1 trillion in U.S. Treasury holdings.

Markets in freefall: Investors brace for "Trade War 2.0"

The financial fallout was immediate. U.S. stock futures signaled another bloodbath on Wall Street, while London's FTSE 100 dropped nearly one percent on Friday. "This is a rather unwelcome development for financial markets," said Michael Brown, senior research strategist at Pepperstone, noting that investors had "by and large moved on from the trade and tariff story" after last year's détente. Some Trump allies, including Vice President JD Vance, struck a more conciliatory tone. "It's going to be a delicate dance," Vance said on Fox News' "Sunday Morning Futures," urging China to "choose the path of reason." He added: "If they respond in a highly aggressive manner, I guarantee you, the president of the United States has far more cards than the People's Republic of China." Yet Beijing shows no signs of backing down."China’s position on the trade war is consistent: we do not want it, but we are not afraid of it," the Commerce Ministry reiterated. The statement echoes China's 2018-2019 playbook, when it weathered U.S. tariffs by devaluing its currency, boosting domestic consumption and targeting swing-state industries like soybeans to pressure Trump politically.

The broader stakes: Supply chains, tech wars and global alliances

Beyond economics, the dispute risks fracturing global supply chains and accelerating the decoupling of the U.S. and Chinese economies—a trend already underway since the Wuhan coronavirus (COVID-19) and the Ukraine war. Rare earths, in particular, are a strategic chokepoint. According to Brighteon.AI's Enoch, China supplies 90 percent of U.S. imports and alternatives. The tech sector is especially vulnerable. Rare earths like neodymium and dysprosium are critical for electric vehicle motors, wind turbines and F-35 fighter jets. A prolonged dispute could cripple green energy transitions and delay military modernization, forcing the U.S. to fast-track domestic mining—a process fraught with environmental and regulatory hurdles. Geopolitically, the tariff threat complicates Trump's efforts to court global allies against China. The EU, Japan and South Korea—all heavily reliant on Chinese exports—may resist aligning with Washington if Trump's policies disrupt their economies. Meanwhile, Russia and North Korea stand to benefit from diverted trade flows, further destabilizing U.S. interests. The next 30 days will be critical. If Trump follows through, the Nov. 1 deadline could trigger a tit-for-tat escalation, with China likely retaliating against U.S. agriculture, Boeing aircraft or Tesla's Shanghai operations. Alternatively, the two sides may return to the negotiating table, as they did in 2019's "Phase One" deal—though that agreement collapsed within months. Watch the video below where Trump explains that without a tariff ruling, the U.S. would be in serious trouble. This video is from the NewsClips channel on Brighteon.com. Sources include: RT.com TheGuardian.com Brighteon.ai Brighteon.com

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