Shares traded on the New York Stock Exchange have plunged after US President Donald Trump's threat to impose tougher tariffs on China. Photo / Getty Images
Cryptocurrency prices have plunged after US President Donald Trump vowed to hit China with fresh 100% tariffs within weeks.
America will also impose export restrictions on “any and all critical software” after Trump accused Beijing of holding the world to ransom by announcing its own round of export controls.
He said on Truth Social: “Starting November 1st, 2025 (or sooner, depending on any further actions or changes taken by China), the United States of America will impose a tariff of 100% on China, over and above any tariff that they are currently paying.
“Also on November 1st, we will impose export controls on any and all critical software.”
Trump said the measures were because China was planning to impose “large-scale export controls on virtually every product they make”.
The US already imposes a 30% tariff on Chinese imports, meaning the new threat would take the total rate to 130%.
The news sent cryptocurrencies diving. The price of Bitcoin fell by more than 10% to below US$110,000 ($192,000), before recovering to US$113,096. The value of Ethereum slumped by 11.2% to US$3878. Cryptocurrencies BNB, Solana and XRP were down by 14.29%, 14.9% and 17.99% respectively.
Stocks on Wall Street also tumbled on Friday (US time) after an earlier Truth Social post when Trump threatened a “massive” increase in tariffs and said he would cancel his upcoming meeting with Chinese President Xi Jinping amid a row over rare earth minerals.
US stocks recorded their biggest single-day losses since April. The US benchmark S&P 500 plunged by 2.71% in its worst day of trading since April 10, which was in the aftermath of Trump’s “Liberation Day” tariffs.
The Nasdaq slumped by 3.56% and the Dow Jones Industrial Average dropped by 1.9%.
Traders pared back their bets on interest rate cuts this year, as the prospect of new tariffs raised inflation fears. The FTSE 100 also closed down 0.9% in London, amid broader fears about the global impact of the row.
Trump’s move has sparked fears of a resumption of a tit-for-tat trade dispute between the two superpowers.
The US imposed tariffs as high as 145% on Chinese goods earlier this year after Trump’s “Liberation Day” tariffs. Beijing responded in kind with levies on US imports of 125%, sending global markets into a tailspin.
Tariffs have come down significantly since then as tensions have eased. In May, after a series of trade talks, Trump reduced levies on Chinese goods to 30%. Analysts had been hoping for progress on a trade deal with the two leaders scheduled to meet in South Korea at the end of the month.
Diplomatic and economic policy between the two has largely hinged on the personal relationship between Presidents Trump and Xi.
Last month the two men agreed to meet after striking a deal over ownership of the US operations of Chinese social media platform TikTok. Trump hailed a “very productive call” with his counterpart, while China’s official news agency Xinhua described the talks as “positive” and “constructive”.
However, the mood has shifted this week after China’s Commerce Ministry on Thursday announced heavy-handed export controls on rare earths.
Global companies selling goods containing rare earths sourced from China must now get permission from Beijing to export them if the rare earths make up at least 0.1% of the product’s value.
The rules will effectively give Beijing sway over huge sections of major economies. China produces 90% of the world’s rare-earth minerals, which are vital in the production of everything from cars to solar panels.
Henry Sanderson, an analyst at the think tank Rusi, said Beijing had made a bid for “extra-territorial control” of the rare earths supply chain.
Trump said: “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.
“But the US has monopoly positions also, much stronger and more far-reaching than China’s. I have just not chosen to use them, there was never a reason for me to do so – UNTIL NOW!”
Analysts have warned Beijing’s export rules have the potential to push the US into recession because of the massive threat to AI development, which has become the driving force of American economic growth.
Trump said: “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.”
Other analysts suggested the threat could be a negotiating tactic. Joe Brusuelas, chief economist at RSM US, said: “The Trump administration loves to start its next round of negotiation with seemingly extreme positions, only to quickly converge and cut a deal, it’s the whole point of being transactional.”
However, he said: “There is always a risk that the rhetoric chosen to bring the Chinese to the table could end up provoking Beijing, who then retaliates.”
Beijing on Friday also announced it would charge additional port fees for American-flagged ships, which it said is a countermeasure to US port fees on Chinese vessels announced in April.
From Tuesday, US ships arriving in China will be charged a fee of US$56.13 per metric tonne, while Chinese ships arriving in the US will be charged a fee of US$80 per metric tonne.
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