That's one way to let the fizz out of the bubbly.*
From the Wall Street Journal, October 10:
President also says he will impose new export controls on critical software in response to Beijing’s moves
President Trump said Friday he would hit China with a 100% additional tariff and impose new export controls on critical software products after Beijing placed sweeping restrictions on the export of rare-earth minerals.
The new measures would take effect Nov. 1, Trump said in a Truth Social post, which came after earlier threats of retaliation sparked a market selloff that sent the S&P 500 to its worst day since April.
The move comes after China this week announced new export restrictions on rare-earth minerals, which are critical components of products such as semiconductors, electric vehicles and jet fighters. China dominates processing capabilities for rare-earth minerals, giving it leverage over the U.S. and other nations.
“It is impossible to believe that China would have taken such an action, but they have, and the rest is History,” Trump wrote.
After months of trade talks with China, U.S. officials were cautiously optimistic the two sides had made progress. But China’s announcement about the new controls Thursday elicited shock and anger within the White House.
Some members of the administration want to effectively restart trade talks from zero with Beijing, according to people familiar with the thinking, and U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer, who have led the talks, are particularly incensed.
The renewed conflict shows that despite months of a tariff truce and repeated meetings between Chinese officials and Trump’s team, relations between the world’s two largest economies remain volatile and can erupt into crisis with little warning.
Still, a critical window for negotiation remains open in the escalating dispute. There is a month between Trump’s Nov. 1 start date for tariffs and Dec. 1, the date Beijing set for new controls on rare-earth exports. The staggered deadlines provide a potential off-ramp for both sides to de-escalate tensions before the punitive measures are enacted.
Trump appeared to leave room for Beijing to step back from its new export controls, saying Friday evening that he had purposely set the imposition date for tariffs a few weeks in the future.
“That’s why I made it November 1, we’ll see what happens,” Trump said.
Earlier Friday, Trump threatened to cancel an expected summit with Chinese leader Xi Jinping in South Korea later this month, blaming Beijing’s new rare-earth measures.
Though Trump later suggested he would still be open to a meeting, the threat surprised some Beijing officials, who didn’t anticipate the action would place the summit at risk. While Beijing remains confident, China analysts say, the unintended threat to the summit could give the Chinese leadership a reason to delay or walk back the measures.
U.S. stocks fell sharply on Trump’s first threat Friday, with the tech-heavy Nasdaq losing more than 3.5%. The S&P 500 fell 2.7%, in its biggest one-day decline since April 10, while the Dow Jones Industrial Average lost nearly 900 points. Stocks had set record after record in recent weeks with investors betting that the worst of the trade war was over.
China’s decision to strengthen its export controls was part of a calculated action to demonstrate Beijing’s leverage over the U.S. economy and force Trump to the negotiating table with a weaker hand, The Wall Street Journal reported this week. Beijing officials see Trump as eager to make a deal, but the Chinese have so far been unable to get the U.S. to agree to the full removal of tariffs and export controls....
....MUCH MORE
October 9 at the Journal:
China’s Rare-Earth Escalation Threatens Trade Talks—and the Global Economy
President Trump says Washington is weighing a response
We thought China's move was noteworthy enough to make it one of the eight links for October 9:
"China unveils sweeping new export rules on rare earths, batteries"
The Chinese seem to be pretty good negotiators.
Like the Indians and the Jews, having a five thousand year history of doing same seems to be an advantage.
While early this morning Marc Chandler made it part of his headline:
Capital Markets: "China Takes Dramatic Measures, While Japan's MOF Warns Against Excessive Yen Moves"
*Major U.S. index futures continued lower after the close of cash trading:
