Washington: US President Donald Trump threatened to hike tariffs against China and cancel a planned meeting with President Xi Jinping, in a broadside against Beijing that sent markets and relations between the world’s largest economies into a spiral.
Trump, due to meet Xi in about three weeks in South Korea, complained on social media about what he called China’s plans to hold the global economy hostage after China dramatically expanded its rare earths export controls on Thursday.
US President Donald Trump’s latest move could revive a destabilising tit-for-tat trade war that Washington and Beijing paused amid painstaking diplomacy earlier this year.Credit: Bloomberg
He said there was no reason to hold the meeting with Xi that he had previously announced. Beijing had never publicly confirmed the meeting between the leaders.
Trump also threatened a “massive” increase in tariffs on US imports from China. The step could revive a destabilising tit-for-tat trade war that Washington and Beijing paused amid painstaking diplomacy earlier this year.
Trump’s unexpected broadside had an immediate impact on US stock prices, with the benchmark S&P 500 Index sliding by 2 per cent after his social media post. The remarks sent investors into the safe haven of US Treasury securities, sending yields on those assets lower, as well as into gold. The US dollar weakened against a basket of foreign currencies.
In his post, Trump said China has been sending letters to countries worldwide saying it planned to impose export controls on every element of production related to rare earths.
“Dependent on what China says about the hostile ‘order’ that they have just put out, I will be forced, as President of the United States of America, to financially counter their move,” Trump said on Truth Social. “For every Element that they have been able to monopolise, we have two.”
He added: “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.”
The White House and the Chinese embassy in Washington did not immediately respond to a request for comment.
