Trump threatens to pull out of Xi meeting, 'massive' new tariffs on China

[USA and China trade war. US of America and chinese flags crashed containers on sky at sunset background. 3d illustration]
Rawf8

President Donald Trump said on Friday he now sees "no reason" to meet with Chinese President Xi Jinping and threatened a "massive increase" in tariffs on Chinese goods, in response to what he called the nation's "hostile" export controls on rare earths.

China has been sending letters to many other countries, saying "they want to impose Export Controls on each and every element of production having to do with Rare Earths, and virtually anything else they can think of, even if it’s not manufactured in China," Trump wrote in a post on Truth Social.

He appeared to be caught off guard by China's move. "Our relationship with China over the past six months has been a very good one, thereby making this move on Trade an even more surprising one," Trump wrote. "This was a real surprise, not only to me, but to all the Leaders of the Free World."

The turn of events puts into question Trump's scheduled meeting with Xi.

"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," he added.

The U.S. president said a "massive" increase in tariffs is one policy his administration is considering. "There are many other countermeasures that are, likewise, under serious consideration," he said, without providing any examples.

Trump also warned that the retaliatory actions may cause some pain for the U.S., but be worth it in the end. "Ultimately, though potentially painful, it will be a very good thing, in the end, for the U.S.A.," he said. [https://bit.ly/4h4Mveo]

U.S. stock averages slumped. The Nasdaq dipped 1.8%, the S&P 500 declined 1.5%, and the Dow was off 1.1% in midday trading.

iShares MSCI China A ETF (BATS:CNYA [https://seekingalpha.com/symbol/CNYA]) fell 3.4%, iShares China Large-Cap ETF (NYSEARCA:FXI [https://seekingalpha.com/symbol/FXI]) slid 3.1%, and SPDR S&P China ETF (NYSEARCA:GXC [https://seekingalpha.com/symbol/GXC]) dropped 3.5%.

Other relevant tickers include: (MCHI [https://seekingalpha.com/symbol/MCHI]), (YINN [https://seekingalpha.com/symbol/YINN]), (YANG [https://seekingalpha.com/symbol/YANG]), (KWEB [https://seekingalpha.com/symbol/KWEB]), (PGJ [https://seekingalpha.com/symbol/PGJ]).

DEAR READERS: We recognize that politics often intersects with the financial news of the day, so we invite you to click here to join the separate political discussion. [https://seekingalpha.com/article/4825352-politics-and-the-markets-101025]

MORE ON ISHARES MSCI CHINA A ETF, ISHARES CHINA LARGE-CAP ETF, ETC.

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